Lowe’s Companies, Inc. (LOW): Are There Still Some Reasons For Optimism?

Lowe’s Companies, Inc.(LOW) shares saw a recent bid of $80.91 and 4.51M shares have exchanged hands in the recent trading session, yielding a -4.35% decline over the past week. The stock price decreased -0.52% or $0.42 versus $81.33 at the end of the prior session. This change led market cap to move at $69.73B, putting the price -6.19% below the 52-week high and 24.73% above the 52-week low. The company’s stock has a normal trading capacity of 5.40M shares while the relative volume is 0.84.

To stay one step ahead we extended our research by comparing different price targets. The stock notched a 12-month high of $89.54 while $100.00 target is by far the most aggressive out of analysts who are currently evaluating the company, $10.46 higher than the next highest 52-week price estimate. The lowest 12-month price target for the shares is $69.00, which would be decrease of about -15% of its current value. The mean target of $89.00 should be compared with the price when the stock was languishing around $64.87 a share. And it remains to be seen which target price LOW can achieve without sacrificing much as the company is holding a 0.94% gain for the past twelve months.

By historical standards, Lowe’s Companies, Inc. remains a cheap stock. The company’s current price-earnings ratio amounts to 25.40 times earnings, above the average P/E ratio of 22.71 times earnings. For now, Lowe’s Companies, Inc. is the toast of Wall Street as its ABR stands at 2.20 with 11 out of 30 analysts rating the stock a buy. Over the short term, some market observers may have noticed that Lowe’s Companies, Inc. has a 0.97% short float with 15 days to cover. It becomes significant when you consider how many shares are shorted versus the average daily volume, means how many days to cover those short shares at that volume. Lowe’s Companies, Inc. has far performed well this year, with the share price up 13.77% since January. Over the past 2 quarters, the stock is up 12.74%, compared with a gain of nearly 5.88% for 3 months and about -5.11% for the past 30 days.

Last time, the company failed Wall Street by reporting EPS of $1.03, smashing the consensus of $1.06 per share. Revenue for the quarter also did not kill consensus, coming in at $16.86B, compared to the consensus of 16.96B. Nonetheless, from here on out, earnings per share forecasts for the current quarter are $1.63. The company is expected to report EPS as high as $1.67 and as low as $1.59 per share. Similarly, full-year EPS forecasts have ranged between $3.53 and $4.00. The mean EPS estimate is $3.90. On the other side, sales forecasts for the current quarter are $19.54B. The stock is expected to report revenue as high as $19.88B and as low as $19.1B per share. Similarly, full-year sales forecasts have ranged between $63.81B and $65.04B. The mean revenue estimate is $64.6B.

Over the last 5 years, Lowe’s Companies, Inc. has averaged a 19.40% YoY EPS growth rate and a 5.30% revenue growth rate. Analysts are expecting EPS growth rates to be at 27.40% this quarter and EPS estimate for next year reflect a 14.39% growth rate.

Sell-side analysts also have something to say about this company. RBC Capital Mkts analysts stated on 02/03/2017 that they maintained their Outperform rating. Bernstein analysts stated on 06/02/2017 that they launched coverage on this stock with Underperform rating. Citigroup had a markedly different take on 19/12/2016, proposing that Lowe’s Companies, Inc. is now considered Neutral versus prior Buy rating. Telsey Advisory Group analysts stated on 08/12/2016 that they maintained their Market Perform rating.

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