/Lowe)
Mooresville, North Carolina-based Lowe's Companies, Inc. (LOW) operates as a home improvement retailer. With a market cap of $144.7 billion, the company offers tools, appliances, building supplies, carpet, bathroom, and lighting products.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and LOW perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the home improvement retail industry. Lowe's has enhanced its omnichannel capabilities, offering seamless online and in-store experiences with flexible fulfillment options, including in-store pickup, curbside delivery, and shipping, which drive customer engagement and sales.
Despite its notable strength, LOW slipped 9.8% from its 52-week high of $287.01, achieved on Oct. 15, 2024. Over the past three months, LOW stock gained 14.7% outperforming the Consumer Discretionary Select Sector SPDR Fund’s (XLY)7.3% gains during the same time frame.
In the longer term, shares of LOW rose 4.8% on a YTD basis, outperforming XLY’s YTD gains of 2.5%. However, the stock climbed 4.1% over the past 52 weeks, underperforming XLY’s 22.9% returns over the same time period.
To confirm the bullish trend, LOW has been trading above its 50-day moving average since late July, with slight fluctuations. The stock has been trading above its 200-day moving average since mid-August.
Lowe's underperformance is driven by a challenging operating environment, marked by high interest rates and weak discretionary spending, which have slowed demand in the home improvement sector amid rising home prices and high mortgage rates.
On Aug. 20, LOW shares closed up marginally after reporting its Q2 results. Its adjusted EPS of $4.33 surpassed Wall Street expectations of $4.23. The company’s revenue was $24 billion, meeting Wall Street forecasts. LOW expects full-year adjusted EPS in the range of $12.20 to $12.45, and expects revenue in the range of $84.5 billion to $85.5 billion.
In the competitive arena of home improvement retail, The Home Depot, Inc. (HD) has taken the lead over LOW, showing resilience with a 10.3% gain over the past 52 weeks but lagging behind the stock with a 4.5% uptick on a YTD basis.
Wall Street analysts are reasonably bullish on LOW’s prospects. The stock has a consensus “Moderate Buy” rating from the 30 analysts covering it, and the mean price target of $281.90 suggests a potential upside of 9% from current price levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
