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

Zacks Equity Research
·3-min read

Lowe's (LOW) closed at $172.34 in the latest trading session, marking a -0.03% move from the prior day. This change lagged the S&P 500's daily gain of 0.03%. Meanwhile, the Dow lost 0.04%, and the Nasdaq, a tech-heavy index, added 0.55%.

Coming into today, shares of the home improvement retailer had gained 6.13% in the past month. In that same time, the Retail-Wholesale sector gained 1.69%, while the S&P 500 gained 3.99%.

Investors will be hoping for strength from LOW as it approaches its next earnings release. On that day, LOW is projected to report earnings of $1.19 per share, which would represent year-over-year growth of 26.6%. Meanwhile, our latest consensus estimate is calling for revenue of $19.24 billion, up 20.05% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.71 per share and revenue of $88.48 billion, which would represent changes of +52.27% and +22.64%, respectively, from the prior year.

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

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 remained stagnant. LOW is currently sporting a Zacks Rank of #2 (Buy).

Looking at its valuation, LOW is holding a Forward P/E ratio of 19.78. This valuation marks a premium compared to its industry's average Forward P/E of 16.02.

We can also see that LOW currently has a PEG ratio of 1.19. 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 1.19 at yesterday's closing price.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 57, putting it in the top 23% 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.

To follow LOW in the coming trading sessions, be sure to utilize Zacks.com.


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