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Lowe's (LOW) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
·3 mins read

Lowe's (LOW) closed at $173.61 in the latest trading session, marking a -0.98% move from the prior day. This change lagged the S&P 500's daily loss of 0.66%. Elsewhere, the Dow lost 0.58%, while the tech-heavy Nasdaq lost 0.8%.

Prior to today's trading, shares of the home improvement retailer had gained 3.73% over the past month. This has lagged the Retail-Wholesale sector's gain of 9.09% and the S&P 500's gain of 5.22% in that time.

Wall Street will be looking for positivity from LOW as it approaches its next earnings report date. The company is expected to report EPS of $1.89, up 34.04% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $20.56 billion, up 18.22% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.49 per share and revenue of $85.11 billion. These totals would mark changes of +48.43% and +17.97%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for LOW. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 has moved 1.1% higher. LOW is currently sporting a Zacks Rank of #1 (Strong Buy).

Investors should also note LOW's current valuation metrics, including its Forward P/E ratio of 20.66. This valuation marks a discount compared to its industry's average Forward P/E of 20.86.

Investors should also note that LOW has a PEG ratio of 1.24 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Building Products - Retail was holding an average PEG ratio of 1.24 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 47, which puts it in the top 19% 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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