Lowe's (LOW) Gains But Lags Market: What You Should Know
Lowe's (LOW) closed the most recent trading day at $191.94, moving +0.94% from the previous trading session. This move lagged the S&P 500's daily gain of 1.42%. Elsewhere, the Dow gained 1%, while the tech-heavy Nasdaq added 5.16%.
Heading into today, shares of the home improvement retailer had lost 7.58% over the past month, lagging the Retail-Wholesale sector's loss of 0.41% and the S&P 500's gain of 0.27% in that time.
Investors will be hoping for strength from Lowe's as it approaches its next earnings release. In that report, analysts expect Lowe's to post earnings of $3.54 per share. This would mark year-over-year growth of 0.85%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $21.85 billion, down 7.63% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $13.83 per share and revenue of $88.84 billion, which would represent changes of -0.43% and -8.47%, respectively, from the prior year.
Any recent changes to analyst estimates for Lowe's should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Within the past 30 days, our consensus EPS projection has moved 0.12% higher. Lowe's currently has a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Lowe's has a Forward P/E ratio of 13.74 right now. This represents a premium compared to its industry's average Forward P/E of 12.32.
We can also see that LOW currently has a PEG ratio of 1.05. 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 1.58 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 33, which puts it in the top 14% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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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