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Lowe's (LOW) Gains As Market Dips: What You Should Know

In the latest trading session, Lowe's (LOW) closed at $206.41, marking a +0.63% move from the previous day. This change outpaced the S&P 500's 0.07% loss on the day. At the same time, the Dow added 0.31%, and the tech-heavy Nasdaq lost 3.22%.

Heading into today, shares of the home improvement retailer had gained 1.6% over the past month, lagging the Retail-Wholesale sector's gain of 8.58% and the S&P 500's gain of 4.64% in that time.

Investors will be hoping for strength from Lowe's as it approaches its next earnings release, which is expected to be February 27, 2023. In that report, analysts expect Lowe's to post earnings of $2.25 per share. This would mark year-over-year growth of 26.4%. Meanwhile, our latest consensus estimate is calling for revenue of $22.77 billion, up 6.71% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $13.76 per share and revenue of $97.36 billion, which would represent changes of +14.29% and +1.15%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Lowe's. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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.

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 remained stagnant. Lowe's currently has a Zacks Rank of #3 (Hold).

Investors should also note Lowe's's current valuation metrics, including its Forward P/E ratio of 14.9. Its industry sports an average Forward P/E of 10.8, so we one might conclude that Lowe's is trading at a premium comparatively.

Investors should also note that LOW has a PEG ratio of 1.13 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. 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 industry currently has a Zacks Industry Rank of 190, which puts it in the bottom 25% 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.

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