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

Zacks Equity Research
·3 mins read

Lowe's (LOW) closed the most recent trading day at $170.87, moving +1.42% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.8%. Meanwhile, the Dow gained 0.43%, and the Nasdaq, a tech-heavy index, added 0.5%.

LOW will be looking to display strength as it nears its next earnings release. On that day, LOW is projected to report earnings of $1.89 per share, which would represent year-over-year growth of 34.04%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $20.56 billion, up 18.22% from the year-ago period.

LOW's full-year Zacks Consensus Estimates are calling for earnings of $8.49 per share and revenue of $85.11 billion. These results would represent year-over-year changes of +48.43% and +17.97%, respectively.

Any recent changes to analyst estimates for LOW should also be noted by investors. 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. 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.

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. Within the past 30 days, our consensus EPS projection has moved 1.1% higher. LOW is holding a Zacks Rank of #1 (Strong Buy) right now.

Investors should also note LOW's current valuation metrics, including its Forward P/E ratio of 19.85. For comparison, its industry has an average Forward P/E of 20.32, which means LOW is trading at a discount to the group.

Investors should also note that LOW has a PEG ratio of 1.2 right now. 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 1.2 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 28, which puts it in the top 12% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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