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

Lowe's (LOW) closed at $222.91 in the latest trading session, marking a +0.53% move from the prior day. This change lagged the S&P 500's 0.74% gain on the day.

Prior to today's trading, shares of the home improvement retailer had gained 8.02% over the past month. This has outpaced the Retail-Wholesale sector's loss of 0.78% and the S&P 500's gain of 1.34% in that time.

LOW will be looking to display strength as it nears its next earnings release. On that day, LOW is projected to report earnings of $2.27 per share, which would represent year-over-year growth of 14.65%. Meanwhile, our latest consensus estimate is calling for revenue of $21.55 billion, down 3.41% from the prior-year quarter.

LOW's full-year Zacks Consensus Estimates are calling for earnings of $11.33 per share and revenue of $93.05 billion. These results would represent year-over-year changes of +27.88% and +3.85%, respectively.

Investors might also notice recent changes to analyst estimates for LOW. 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.

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. The Zacks Consensus EPS estimate has moved 0.59% higher within the past month. LOW is currently sporting a Zacks Rank of #2 (Buy).

Investors should also note LOW's current valuation metrics, including its Forward P/E ratio of 19.57. This valuation marks a premium compared to its industry's average Forward P/E of 16.96.

It is also worth noting that LOW currently has a PEG ratio of 1.38. 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. LOW's industry had an average PEG ratio of 1.95 as of yesterday's close.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 14, which puts it in the top 6% 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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