Lowe's (LOW) Outpaces Stock Market Gains: What You Should Know
Lowe's (LOW) closed at $177.09 in the latest trading session, marking a +1.12% move from the prior day. This move outpaced the S&P 500's daily gain of 0.47%. Elsewhere, the Dow gained 0.4%, while the tech-heavy Nasdaq added 0.33%.
Heading into today, shares of the home improvement retailer had gained 9.73% over the past month, outpacing the Retail-Wholesale sector's gain of 7.48% and the S&P 500's gain of 3.42% in that time.
LOW will be looking to display strength as it nears its next earnings release, which is expected to be November 18, 2020. The company is expected to report EPS of $1.89, up 34.04% from the prior-year quarter. 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.
It is also important to note the 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.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.07% higher. LOW currently has a Zacks Rank of #2 (Buy).
Investors should also note LOW's current valuation metrics, including its Forward P/E ratio of 20.64. For comparison, its industry has an average Forward P/E of 20.44, which means LOW is trading at a premium to the group.
It is also worth noting that LOW currently has a PEG ratio of 1.24. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock'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 106, which puts it in the top 42% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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