Lowe's plays second fiddle to Home Depot's concertmaster status in terms of sheer size. But there's clearly room for two home repairs and construction supplies giants because Lowe's has been putting up some strong earnings numbers. And on Wednesday the Relative Strength (RS) Rating for Lowe's stock climbed into a new percentile, with an increase from 80 to 83.
Lowe's Stock Joins Elite Group
The 83 RS Rating shows that Lowe's stock has performed better than 83% of all other stocks in terms of price performance over the past year. It's a notable upgrade because market research shows that the stocks that go on to make the biggest gains tend to have an RS Rating of at least 80 in the early stages of their moves.
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With summer here, more people and businesses are likely to make improvements and repairs than in the cold winter months. That bodes well for Charlotte, N.C. area-based Lowe's, Home Depot and others in the group.
Lowe's stock is in a buy zone after clearing a 213.79 buy point in a cup with handle. The proper buying range is up to 5% above the initial entry. Once a stock moves above that range, it's best to wait for it to set up another buying opportunity. Its stock has soared about 270% from a Covid crash intraday low 60 in late March 2020 to 222.41 Wednesday afternoon, down fractionally for the day amid market consolidation.
Among its other major ratings watchlist candidate Lowe's stock has a strong 81 Composite Rating, out of 99, putting it in the top 19% of stocks for a group of the most important fundamental and technical metrics. Its Earnings Per Share Rating is an excellent 95, meaning it tops 95% of companies on recent and long-term profit growth. An Accumulation/Distribution Rating of B, on an A+ to E scale, shows moderately heavy buying by big funds.
Q1 Results Paled Vs. 2022; Can Lowe's Improve In Q2?
The company posted 5% earnings growth in the latest quarterly report, to $3.67 per share. That was its weakest gain in a year after it reported EPS growth of 10%, 20% and 28% the prior three periods. Sales slid 6% last quarter to $22.3 billion. That reversed from 5% growth the prior quarter and was also its worst showing in a year. Look for sales and profit growth to improve this quarter.
Lowe's stock holds the No. 3 rank among its peers in the Retail/Wholesale-Building Products industry group. Floor & Decor is No. 1 in the group. Lowe's archrival Home Depot is No. 5 among the group's highest-rated stocks.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.
IBD's unique RS Rating tracks technical performance by using a 1 (worst) to 99 (best) score that shows how a stock's price performance over the last 52 weeks matches up against the rest of the market.
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