/Lowe)
North Carolina-based Lowe's Companies, Inc. (LOW) operates as a leading home improvement retailer. With a market cap of $139.9 billion, the company provides a broad range of products and services for home maintenance, remodeling, and construction to both individual and professional customers.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Lowe's fits this criterion perfectly, exceeding the mark. Lowe's uniqueness lies in its customer-centric approach, offering a vast selection of home improvement products along with personalized services like installation and repair, catering to both DIY enthusiasts and professional contractors across its extensive retail and digital platforms.
However, the home improvement retailer has slipped 6.5% from its 52-week high of $262.49, achieved in March. Despite this, shares of LOW have gained 13.4% over the past three months, outpacing the broader S&P 500 Index ($SPX), which has seen gains of 4.3% during the same period.
However, longer term, LOW is up 10.3% on a YTD basis, lagging behind SPX's 15.7% gains. Moreover, shares of Lowe's have risen by 5.6% over the past 52 weeks, compared to SPX's 22.2% returns over the same time frame.
But, LOW has been trading above its 200-day and 50-day moving averages since July.
Lowe's has underperformed over the past year due to reduced DIY spending, high interest rates affecting the housing market, and a slowdown in customer demand for remodeling and upgrades. Moreover, on Aug. 20, the stock fell 1.2% due to the company reducing its annual profit and sales forecasts, expecting a 3.5% to 4% drop in comparable sales for the year and adjusted EPS of $11.70 to $11.90, driven by ongoing high interest rates and tepid home improvement demand. Additionally, unexpected warm weather during the spring season and a 5.1% drop in Q2 comparable sales further contributed to investor concerns.
In comparison, its rival, The Home Depot, Inc. (HD), has gained 9.5% over the past 52 weeks, outpacing LOW’s return over the same period. Though, HD is up 5.2% on a YTD basis, slightly behind Lowe's performance.
Despite the stock’s underperformance, analysts think LOW can recover soon. The stock has a consensus rating of “Moderate Buy” from the 30 analysts in coverage, and the mean price target of $252.48 is a premium of only 2.9% to current levels.
On the date of publication, Sohini Mondal 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.
