Lowe's (LOW) Laps the Stock Market: Here's Why
In the latest trading session, Lowe's (LOW) closed at $274.51, marking a +1.26% move from the previous day. This move outpaced the S&P 500's daily gain of 0.1%. On the other hand, the Dow registered a gain of 0.69%, and the technology-centric Nasdaq increased by 0.06%.
The home improvement retailer's shares have seen a decrease of 1.69% over the last month, not keeping up with the Retail-Wholesale sector's gain of 5.33% and the S&P 500's gain of 4.37%.
The upcoming earnings release of Lowe's will be of great interest to investors. The company's earnings report is expected on November 19, 2024. In that report, analysts expect Lowe's to post earnings of $2.80 per share. This would mark a year-over-year decline of 8.5%. Alongside, our most recent consensus estimate is anticipating revenue of $19.9 billion, indicating a 2.77% downward movement from the same quarter last year.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $11.92 per share and a revenue of $83 billion, signifying shifts of -9.7% and -3.91%, respectively, from the last year.
Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Lowe's. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, there's been a 0.02% rise in the Zacks Consensus EPS estimate. At present, Lowe's boasts a Zacks Rank of #3 (Hold).
In terms of valuation, Lowe's is currently trading at a Forward P/E ratio of 22.75. Its industry sports an average Forward P/E of 21.59, so one might conclude that Lowe's is trading at a premium comparatively.
It's also important to note that LOW currently trades at a PEG ratio of 2.23. 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 2.52 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 40, putting it in the top 16% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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