/Lowe)
Headquartered in Mooresville, North Carolina, Lowe's Companies, Inc. (LOW) operates as a home improvement company and offers a line of products for maintenance, repair, remodeling, and decorating. Coming with a market cap of $138.99 billion, the company sells its national brand-name merchandise and private branded products to homeowners, renters, and professional customers, and retail customers.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and LOW fits right into that category, signifying its substantial size, stability, and dominance in the home improvement industry. Offering a range of home improvement goods including lumber and building materials, tools and hardware, appliances, fashion fixtures, rough plumbing and electrical, the company benefits from robust retail sales.
However, the retail giant has fallen 16.4% from its 52-week high of $287.01, which it hit on October 15. Shares of LOW have declined 11.9% over the past three months, underperforming the Dow Jones Industrials Average’s ($DOWI) 5.5% decline over the same time period.
Moreover, LOW shares have fallen 2.3% over the past six months and marginally over the past 52 weeks. By contrast, $DOWI has gained 3.8% over the past six months and 9.1% over the past 52 weeks.
LOW has been trading below its 50-day moving average since early-February and under its 200-day moving average since mid-February.
Lowe's underperformance has primarily stemmed from concerns about slowing sales growth in the home improvement retail sector, increased competition from online retailers, rising operational costs, and a general market sentiment leaning towards more defensive investments.
However, LOW shares jumped 1.9% with its fiscal 2024 Q4 release on Feb. 26. The company announced an 8.5% increase in its operating income, which amounted to $1.8 billion. Moreover, its EPS came in at $1.93, surpassing the Wall Street EPS estimates by 5.5%.
LOW’s top competitor in the retail home improvement industry, The Home Depot, Inc. (HD), is in the lead, with its shares gaining 4.7% over the past six months and marginally over the past 52 weeks.
However, Wall Street analysts remain reasonably bullish on LOW’s prospects. The stock holds a consensus “Moderate Buy” rating from the 32 analysts covering it. The mean target of $281.41 suggests a potential upside of 17.3% from the current market prices.
On the date of publication, Kritika Sarmah 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.
