Technicals Say Lowe’s Companies Inc. (LOW) Is A Hold

Lowe’s Companies Inc. (NYSE:LOW) trading with an addition of $3.66 to $215.78 on Thursday, an upside of 1.73 percent. An average of 2,632,177 shares of common stock have been traded in the last five days. There was a gain of $6.20 in the past week, and it reached a new high 20 times over the past 12 months. The last 20 days have seen an average of 3,254,559 shares traded, while the 50-day average volume stands at 3,591,710.

LOW stock has increased by 3.89% in the last month. The company shares reached their 1-month lowest point of $201.48 on 09/15/21. With the stock rallying to its 52-week high on 10/14/21, shares of the company touched a low of $146.72 and a high of $215.22 in 52 weeks. It has reached a new high 34 times so far this year and achieved 32.15% or $53.59 in price. In spite of this, the price is up 0.26% from the 52-week high.


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Insider Transactions

134 days have passed since Lowe’s Companies Inc. (LOW) last reported insider trading activity. Godbole Seemantini, who is EVP, Chief Information Officer, most recently acquired $15,234 shares at $190.77 per share on Jun 02.

Valuation Metrics

Lowe’s Companies Inc. (LOW) has a trailing price-to-earnings (P/E) ratio of 21.87, which compares with the 21.00 for the broader industry and 31.28 for the sector. In the last five years, Lowe’s Companies Inc.’s PE ratio has ranged between 41.85 and 11.89. The stock’s beta is 1.28. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 1.59, and the price-to-cash flow ratio at 59.17.

Lowe’s Companies Inc. pays a $3.20 dividend per share annually. It offers a dividend yield of 1.48%. The company has a payout ratio of 24.20%. The company’s most recent quarterly dividend payment was $0.80 a share, without any change from last year. Its dividend has been increased for the last 47 consecutive years with the latest increase dividend $0.20 reported on Thursday May 27 2021. Dividends have grown by 48.03% each year over the last three years.

Lowe’s Companies Inc. will next go ex-dividend on 19-Oct-2021. The next dividend payment Lowe’s Companies Inc. will make is expected to be $0.80.

The quick ratio of Lowe’s Companies Inc. for the three months ended July 30 was 0.40, and the current ratio was 1.20, indicating that the company is not able to meet its debt obligations. On the profitability front, the trailing 12-month gross margin is 33.00% against a 5-year average of 32.6%. Lowe’s Companies Inc.’s EBITDA margin for the year ending July 30 is 14.46%, while its operating margin for the same period stands at 10.70%. Its gross profit as reported stood at $29.57 billion compared to revenue of $89.6 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Lowe’s Companies Inc.’s return on assets was 14.10%, compared to 10.2% over the last five years. In the past year, the return on investment has been 28.80%, and the 5-year average is 18.3%. Meanwhile, the return on equity (ROE) for the past 12 months has been 483.20% and the 5-year average holds at 128.1%. For the broader industry, ROE averaged 10.33 over the past year.

Earnings Surprise

For the three-month period that ended July 30, Lowe’s Companies Inc. had $1.42 billion in cash and short-term investments compared to $21.97 billion in total debt. In the quarter under review, the net income was up than the previous quarter. The company posted a net income of $3.02 billion in the quarter, while revenues of $2.32 billion were grew 6.3%. The analyst consensus anticipated Lowe’s Companies Inc.’s latest quarter earnings to come in at $4.01 per share, but it turned out to be $4.25, a 6.00% surprise. For the quarter, EBITDA amounted to $4.67 billion. Shareholders own equity worth $692.43 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Lowe’s Companies Inc. (LOW) price momentum. RSI 9-day as of the close on 13 October was 70.41%, suggesting the stock is Overbought, with historical volatility in this time frame at 11.78%.

As of today, LOW’s price is $210.21 +2.98% or $6.20 from its 5-day moving average. LOW is currently trading +2.70% higher than its 20-day SMA and +12.29% higher than its 100-day SMA. However, the stock’s current price level is +12.74% above the SMA50 and +33.36% above the SMA200.

The stochastic %K and %D were 84.82% and 75.02%, respectively, and the average true range (ATR) was 3.91. With the 14-day stochastic at 89.94% and the average true range at 3.95, the RSI (14) stands at 64.71%. The stock has reached 4.04 on the 9-day MACD Oscillator while the 14-day reading was at 4.76.

Analyst Ratings

Loop Capital downgraded Lowe’s Companies Inc. (NYSE: LOW) to a a Hold rating in its most recent analyst report. Previously, the stock was rated as a a Buy.The consensus rating for Lowe’s Companies Inc. (LOW) among analysts is Overweight. According to current brokerage recommendations, 0 brokerage firms advise that investors sell LOW, while 7 suggest investors hold. There are 1 analyst who rate the stock as underweight. The stock is rated overweight by 6 analysts, while 20 others rate it as a “buy”.

What is LOW’s price target for the next 12 months?

Analysts predict a range of price targets between $205.00 and $281.00, with a median target of $232.00. Taking a look at these predictions, the average price target given by analysts for Lowe’s Companies Inc. (LOW) stock is $232.00.

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