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Lowe's (LOW) Gains But Lags Market: What You Should Know

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Lowe's (LOW - Free Report) closed the most recent trading day at $237.35, moving +1% from the previous trading session. This change lagged the S&P 500's 1.89% gain on the day. Elsewhere, the Dow gained 1.17%, while the tech-heavy Nasdaq added 0.73%.

Coming into today, shares of the home improvement retailer had lost 9.09% in the past month. In that same time, the Retail-Wholesale sector lost 11.09%, while the S&P 500 lost 7.36%.

Lowe's will be looking to display strength as it nears its next earnings release. In that report, analysts expect Lowe's to post earnings of $1.71 per share. This would mark year-over-year growth of 28.57%. Meanwhile, our latest consensus estimate is calling for revenue of $20.81 billion, up 2.45% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $11.95 per share and revenue of $95.64 billion, which would represent changes of +34.88% and +6.74%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Lowe's. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.06% higher. Lowe's is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that Lowe's has a Forward P/E ratio of 19.66 right now. This valuation marks a premium compared to its industry's average Forward P/E of 10.88.

Also, we should mention that LOW has a PEG ratio of 1.44. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Building Products - Retail stocks are, on average, holding a PEG ratio of 1.69 based on yesterday's closing prices.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 20, putting it in the top 8% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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