Lowe's Companies (LOW) stock: what's the sentiment?

1:42 pm ET, 21 Aug 2018

Lowe's Companies, Inc. (LOW) shares are trading at 100.13, up 1%. The company is reporting its second-quarter earnings, due out before the market opens on August 22. What's driving LOW stock price? What's LOW stock price forecast?

Investors are optimistic about Lowe's earnings since Walmart and Home Depot reported positive results most recently.  This will be the first earnings report under the new CEO Marvin Ellison, who was formerly an executive at Home Depot.  However, Lowe's performance is trailing the retail ETF XRT: it is up 6 percent vs. XRT 's 14 percent gain. 

The key number to watch in the earnings is comparable-store sales, and all signs point to a positive uptick for this key metric. Home Depot saw its growth rate double between the first and second quarter as customers made their spring purchases a bit later than usual. Lowe's executives suggested in late May that a similar trend may be applicable to the company, so analysts are expecting a big boost here.

What is the sentiment towards the LOW stock? Our technical analysis shows that: 

  • The stock short-term sentiment (next 30 days) is negative;
  • The mid-term sentiment (3-6 months) is trending negative;
  • The long-term sentiment (9-12 months) is positive. 

Over the last month, Lowe's Companies (LOW) returned -1.84%.

Lowe's Companies (LOW) average analyst price target ($106.39) is 8.72% above its current price ($97.86).

For the latest price and information on Lowe's Companies, Inc., please visit Finstead and search for "LOW price" or "LOW news".

Lowe's Companies, Inc. (LOW) Stock Guide

Updated at: 4:28 am ET, 18 Sep 2020

Before we start: if you're looking for LOW stock price, you can quickly find it out by visiting Finny and typing "LOW quote". If you're looking for a quick scoop on LOW stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "LOW". You'll get all this info in one place. Or you can just type "LOW news" to get the latest stock news.

Looking to buy or sell Lowe's Companies, Inc. (LOW)? Interested in getting the full scoop on LOW, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this LOW stock guide, we'll address key questions about LOW, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are LOW earnings?
2. What is LOW dividend?
3. What is LOW dividend yield?
4. What is LOW stock forecast (i.e., prediction)?
5. LOW buy or sell? What is LOW Finny Score?
6. What are the reasons to buy LOW? Why should I buy LOW stock?
7. What are the reasons to sell LOW? Why should I sell LOW stock?
8. What are LOW key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are LOW earnings?

LOW trailing 12-month earnings per share (EPS) is $7.50.

2. What is LOW dividend?

LOW forward dividend is $2.40.

3. What is LOW dividend yield?

LOW forward dividend yield is 1.46%.

Analyst Predictions

4. What is LOW stock forecast (i.e., prediction)?

Based on LOW analyst price targets, LOW stock forecast is $181.50 (for a year from now). That means the average analyst price target for LOW stock is $181.50. The prediction is based on 32 analyst estimates.

The low price target for LOW is $146.00, while the high price target is $205.00.

LOW analyst rating is Buy.

Analysis

5. LOW buy or sell? What is LOW Finny Score?

#{finnyScore:70}Our quantitative analysis shows 7 reasons to buy and 3 reasons to sell LOW, resulting in Finny Score of 70.

6. What are the reasons to buy LOW? Why should I buy LOW stock?

Here are the reasons to buy LOW stock:

  • Management is targeting 11.2% operating margins and 22% ROIC in 2019, which offers upside to our base-case operating margin assumption of 10.9% and ROIC of 22%.
  • A stable housing market provides operating leverage, generating an estimated cumulative free cash flow of $27 billion over the next five years, enough to repurchase more than 30% of outstanding shares.
  • Initiatives that improve client service by specialists continue to roll out along with more cross-selling knowledge, which should drive commercial and installation project business revenue, outpacing core retail sales.
  • We believe that an improving job scenario, gradual recovery in the housing market and merchandising initiatives bode well. In addition, the Canadian and Mexican businesses have been performing quite well.
  • In an effort to strengthen its relationship with Pro customers, Lowe's has concluded the acquisition of Maintenance Supply Headquarters, the distributor of maintenance, repair and operations (“MRO”) products. This $512 million buyout will help in adding multi-family property management customers. Of late, Lowe’s has been focusing on maintenance, repair and operations products which is evident from its acquisition of Maintenance Supply Headquarters and also the earlier buyout of Central Wholesalers.
  • Lowe's is benefiting from its strategic acquisitions. This is evident from the buyout of Orchard Supply Hardware Stores that is aiding comparable-store sales growth. We believe the Orchard acquisition is a crucial move on Lowe’s part as increasing square footage in the key Californian market brings significant opportunities for the company to improve its top line and profitability.
  • LOW quarterly revenue growth was 30.10%, higher than the industry and sector average revenue growth (0.15% and 0.78%, respectively). See LOW revenue growth chart.
  • LOW profitability is improving. The YoY profit margin change was 0.27 percentage points. See LOW profitability chart.
  • LOW forward dividend yield is 1.46%, higher than the industry (1.02%) and sector (0.55%) forward dividend yields. See LOW forward dividend chart.
  • LOW PEG ratio (P/E adjusted for growth) is 0.89, which is low compared to its industry peers’ PEG ratios. See LOW PEG chart.
  • LOW average analyst rating is Buy. See LOW analyst rating chart.
  • LOW average analyst price target ($181.50) is above its current price ($163.78). See LOW price target chart.
  • LOW cash to debt ratio is 0.49, higher than the average industry (0.26) and sector (0.13) cash to debt ratio. See LOW cash to debt chart.

7. What are the reasons to sell LOW? Why should I sell LOW stock?

Let's look at the reasons to sell LOW stock (i.e., the bear case):

  • Slower domestic footprint growth may drive increased competitive pricing pressures between Lowe's and Home Depot, constraining ROIC expansion and limiting top-line growth.
  • Higher interest rates, flat housing price growth, or tighter lending standards could slow turnover, postponing home improvement projects and hindering Lowe's sales.
  • Margins could be pressured over the near term as lower-margin Rona and acquired MRO companies are folded into the enterprise. Integration risks could exist if combining the entities is more difficult than originally anticipated.
  • Estimates have been trending down lately ahead of first-quarter fiscal 2018 earnings release, as analysts remain apprehensive about unfavorable weather that might result in lower spring seasonal spending, and in turn could hurt the company's top line.
  • In the home improvement retailing business, Lowe’s faces stiff competition from The Home Depot and other home supply retailers on attributes such as location, price and quality of merchandise, in-stock consistency, merchandise assortments and customer service. This may weigh on the company’s upcoming results.
  • The company’s customers remain sensitive to macroeconomic factors including interest rate hikes, increase in fuel and energy costs, credit availability, unemployment levels, and high household debt levels, which may negatively impact their discretionary spending, and in turn the company’s growth and profitability. An unfavorable economy might delay home improvement projects, which in turn could hamper sales of product categories and services provided by the company.
  • The company’s expansion in regions where it already serves could cannibalize its sales performance and lower traffic count at its existing stores in the area. Consequently, this may have a negative impact on the company’s overall performance.
  • LOW stock price ($163.78) is close to the 52-week high ($171.10). Perhaps now is a good time to sell? See LOW price chart.
  • LOW Price/Book ratio is 29.09, which is high compared to its industry peers’ P/B ratios. See LOW forward Price/Book ratio chart.
  • LOW short interest (days to cover the shorts) ratio is 2.13. The stock garners more short interest than the average industry, sector or S&P 500 stock. See LOW short interest ratio chart.

Key Stats

8. What are LOW key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for LOW:

Metrics LOW
Price $159.53
Average Price Target / Upside $181.50 / 13.77%
Average Analyst Rating Buy
Forward Dividend Yield 1.46%
Industry Home Improvement Stores
Sector Consumer Cyclical
Number of Employees 310,000
Market Cap $126.65B
Forward P/E Ratio 19.65
Price/Book Ratio 1.58
Revenue (TTM) $80.39B
YoY Quarterly Revenue Growth 30.10%
Profit Margin 7.12%

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