Lowe's (LOW) Outpaces Stock Market Gains: What You Should Know

Lowe's (LOW) closed at $176.33 in the latest trading session, marking a +1.57% move from the prior day. This change outpaced the S&P 500's 0.95% gain on the day. At the same time, the Dow added 0.64%, and the tech-heavy Nasdaq gained 0.23%.

Prior to today's trading, shares of the home improvement retailer had lost 7.93% over the past month. This has lagged the Retail-Wholesale sector's gain of 2.16% and the S&P 500's loss of 3.49% in that time.

Investors will be hoping for strength from Lowe's as it approaches its next earnings release. The company is expected to report EPS of $4.68, up 10.12% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $28.33 billion, up 2.77% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $13.49 per share and revenue of $97.87 billion. These totals would mark changes of +12.04% and +1.69%, respectively, from last year.

Any recent changes to analyst estimates for Lowe's should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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. Within the past 30 days, our consensus EPS projection remained stagnant. Lowe's is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Lowe's has a Forward P/E ratio of 12.87 right now. Its industry sports an average Forward P/E of 7.47, so we one might conclude that Lowe's is trading at a premium comparatively.

We can also see that LOW currently has a PEG ratio of 1.02. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Building Products - Retail was holding an average PEG ratio of 1.61 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 48, which puts it in the top 19% 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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