On March 28, Lowe’s (LOW) was trading at $108.35, a rise of 16.3% since the beginning of the year. The company has outperformed Home Depot (HD), which has risen 10.6% YTD (year-to-date), and the S&P 500 Index, which has risen 12.3% YTD. However, the SPDR S&P Homebuilders ETF (XHB), which invests 22.5% of its holdings in home improvement and furnishing companies, has outperformed Lowe’s, returning 18.6% YTD.
Lowe’s is trading at a premium of 33.5% to its 52-week low of $81.16 and a discount of 7.9% to its 52-week high of $117.70.
Lowe’s posted its fourth-quarter earnings results on February 27. During the quarter, the company’s sales fell short of analysts’ expectation. However, its SSSG (same-store sales growth) in the United States showed improvement, reaching 5.8% in January. The improvement in Lowe’s SSSG and its management’s strong economic outlook for the United States in 2019 appear to have led to a rise in its stock price. The strengthening of the broader equity market due to a surge in job growth in January and February, wage inflation, and the Fed’s toning down its aggressive rate hike stance has contributed to the increase in the company’s stock price.
In this series, we’ll look at analysts’ recommendations for Lowe’s and compare its valuation with those of its peers. We’ll also cover analysts’ estimates, management’s guidance for 2019, and the factors that could drive the company’s revenue and EPS.