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Why Lowe’s Hit a New 52-Week High on January 12

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Stock performance

On January 12, 2018, Lowe’s Companies (LOW) hit a new 52-week high of $102.28. However, it closed the day at $100.86, which represents a growth of 5.4% from its previous day’s closing price of $95.74.

On January 12, 2018, Bloomberg reported that D.E. Shaw & Co. had built an active stake in Lowe’s. Some analysts expect the stake could be utilized by D.E. Shaw to agitate for changes at Lowe’s. In the last five quarters, Lowe’s SSSG (same-store sales growth) has been lower than Home Depot’s (HD). So the report of an increase in D.E. Shaw’s stake in Lowe’s appears to have raised investor confidence, leading to a rise in LOW stock.

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Lowe’s started 2018 on a strong note with its stock returning 8.5% since the beginning of the year. During the same period, its peers Home Depot (HD), Williams-Sonoma (WSM), and Bed Bath & Beyond (BBBY) have returned 3.6%, 7.3%, and 3.8%, respectively. The broader comparative index, the S&P 500 Index (SPX-INDEX), and the SPDR S&P Homebuilders ETF (XHB) have returned 4.2%, and 4.4%, respectively.

Stock performances in 2017

It was a good year for home improvement companies in 2017. Lowe’s, Home Depot, and Williams-Sonoma returned 30.7%, 41.4%, and 6.8%, respectively. However, the stock price of Bed Bath & Beyond fell 45.9%. The stocks of home improvement companies were driven by increased sales due to improvement in macroeconomic factors such as the housing price index, higher housing turnover, lower unemployment, and hurricane-related sales.

Next, we’ll look at analysts’ recommendations for Lowe’s.

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