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Lowe's (LOW) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Lowe's (LOW - Free Report) closed at $109.53, marking a -1.89% move from the previous day. This move lagged the S&P 500's daily loss of 0.08%. Elsewhere, the Dow lost 0.07%, while the tech-heavy Nasdaq lost 0.59%.

Coming into today, shares of the home improvement retailer had gained 1.53% in the past month. In that same time, the Retail-Wholesale sector gained 3.2%, while the S&P 500 gained 2.7%.

LOW will be looking to display strength as it nears its next earnings release, which is expected to be November 20, 2019. On that day, LOW is projected to report earnings of $1.34 per share, which would represent year-over-year growth of 28.85%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.71 billion, up 1.71% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.67 per share and revenue of $72.53 billion, which would represent changes of +10.31% and +1.71%, respectively, from the prior year.

Any recent changes to analyst estimates for LOW should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 0.01% higher. LOW is holding a Zacks Rank of #2 (Buy) right now.

Digging into valuation, LOW currently has a Forward P/E ratio of 19.7. Its industry sports an average Forward P/E of 14.35, so we one might conclude that LOW is trading at a premium comparatively.

Also, we should mention that LOW has a PEG ratio of 1.41. 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. LOW's industry had an average PEG ratio of 1.38 as of yesterday's close.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 65, putting it in the top 26% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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