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

In the latest trading session, Lowe's (LOW) closed at $119.35, marking a +1.85% move from the previous day. The stock outpaced the S&P 500's daily gain of 1.5%. At the same time, the Dow added 1.44%, and the tech-heavy Nasdaq gained 2.1%.

Coming into today, shares of the home improvement retailer had lost 2.63% in the past month. In that same time, the Retail-Wholesale sector gained 0.37%, while the S&P 500 gained 0.54%.

LOW will be looking to display strength as it nears its next earnings release, which is expected to be February 26, 2020. The company is expected to report EPS of $0.91, up 13.75% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $16.19 billion, up 3.47% from the year-ago period.

Any recent changes to analyst estimates for LOW should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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.

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 0.07% higher. LOW is currently a Zacks Rank #2 (Buy).

Investors should also note LOW's current valuation metrics, including its Forward P/E ratio of 17.51. Its industry sports an average Forward P/E of 13.85, so we one might conclude that LOW is trading at a premium comparatively.

Also, we should mention that LOW has a PEG ratio of 1.25. 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. Building Products - Retail stocks are, on average, holding a PEG ratio of 1.24 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 221, putting it in the bottom 14% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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