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

In the latest trading session, Lowe's (LOW) closed at $150.27, marking a +0.91% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.72%. At the same time, the Dow added 0.89%, and the tech-heavy Nasdaq gained 1.47%.

Heading into today, shares of the home improvement retailer had gained 9.73% over the past month, lagging the Retail-Wholesale sector's gain of 10.77% and outpacing the S&P 500's gain of 5.85% in that time.

Investors will be hoping for strength from LOW as it approaches its next earnings release, which is expected to be August 19, 2020. The company is expected to report EPS of $1.25, down 41.86% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $23.32 billion, up 11.09% from the year-ago period.

LOW's full-year Zacks Consensus Estimates are calling for earnings of $6.74 per share and revenue of $77 billion. These results would represent year-over-year changes of +17.83% and +6.73%, respectively.

Investors might also notice recent changes to analyst estimates for LOW. Recent revisions tend to reflect the latest near-term business trends. 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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.22% higher. LOW is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, LOW is currently trading at a Forward P/E ratio of 22.11. For comparison, its industry has an average Forward P/E of 19.69, which means LOW is trading at a premium to the group.

It is also worth noting that LOW currently has a PEG ratio of 1.41. 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. Building Products - Retail stocks are, on average, holding a PEG ratio of 2.31 based on yesterday's closing prices.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 21, putting it in the top 9% 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Lowes Companies, Inc. (LOW) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research