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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 $97.92, moving +0.91% from the previous trading session. This move lagged the S&P 500's daily gain of 1.3%. At the same time, the Dow added 1.21%, and the tech-heavy Nasdaq gained 1.39%.

Prior to today's trading, shares of the home improvement retailer had lost 7.28% over the past month. This has lagged the Retail-Wholesale sector's loss of 6.28% and the S&P 500's loss of 4.84% in that time.

Investors will be hoping for strength from LOW as it approaches its next earnings release, which is expected to be August 21, 2019. On that day, LOW is projected to report earnings of $2.02 per share, which would represent a year-over-year decline of 2.42%. Meanwhile, our latest consensus estimate is calling for revenue of $21 billion, up 0.52% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.59 per share and revenue of $72.47 billion. These totals would mark changes of +8.75% and +1.62%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for LOW. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.04% lower. LOW is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that LOW has a Forward P/E ratio of 17.36 right now. For comparison, its industry has an average Forward P/E of 12.95, which means LOW is trading at a premium to the group.

Investors should also note that LOW has a PEG ratio of 1.26 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Building Products - Retail was holding an average PEG ratio of 1.29 at yesterday's closing price.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 211, which puts it in the bottom 18% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow LOW in the coming trading sessions, be sure to utilize Zacks.com.


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