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

·3-min read

Lowe's (LOW) closed at $198.91 in the latest trading session, marking a -0.71% move from the prior day. This move lagged the S&P 500's daily gain of 1.49%.

Coming into today, shares of the home improvement retailer had lost 2.07% in the past month. In that same time, the Retail-Wholesale sector lost 5.6%, while the S&P 500 lost 0.62%.

LOW will be looking to display strength as it nears its next earnings release, which is expected to be May 19, 2021. On that day, LOW is projected to report earnings of $2.54 per share, which would represent year-over-year growth of 43.5%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $23.37 billion, up 18.76% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.95 per share and revenue of $88.33 billion, which would represent changes of +12.3% and -1.41%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for LOW. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. The Zacks Consensus EPS estimate has moved 2.16% higher within the past month. LOW is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, LOW is holding a Forward P/E ratio of 20.14. This valuation marks a premium compared to its industry's average Forward P/E of 16.58.

It is also worth noting that LOW currently has a PEG ratio of 1.55. 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 industry currently had an average PEG ratio of 1.55 as of yesterday's close.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 59, putting it in the top 24% 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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