Lowe's Companies Inc. Stock Buy Recommendation Reiterated (LOW)

NEW YORK (TheStreet) -- Lowe's Companies (NYSE:LOW) has been reiterated by TheStreet Ratings as a buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, growth in earnings per share, increase in net income and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins.

• ACTIVE STOCK TRADERS: Check out TheStreet's special offer for Real Money, headlined by Jim Cramer, now!

Highlights from the ratings report include:

• Despite its growing revenue, the company underperformed as compared with the industry average of 8.0%. Since the same quarter one year prior, revenues slightly increased by 7.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
• Net operating cash flow has slightly increased to $2,467.00 million or 1.81% when compared to the same quarter last year. In addition, LOWE'S COMPANIES INC has also modestly surpassed the industry average cash flow growth rate of 1.43%.
• LOWE'S COMPANIES INC has improved earnings per share by 26.5% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, LOWE'S COMPANIES INC's EPS of $1.42 remained unchanged from the prior years' EPS of $1.42. This year, the market expects an improvement in earnings ($1.82 versus $1.42).
• The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income increased by 14.3% when compared to the same quarter one year prior, going from $461.00 million to $527.00 million.
• Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

Lowe's Companies, Inc., together with its subsidiaries, operates as a home improvement retailer. It offers a range of products for maintenance, repair, remodeling, and home decorating. The company has a P/E ratio of 17.5, below the average retail industry P/E ratio of 17.7and below the S&P 500 P/E ratio of 17.7. Lowe's Companies has a market cap of $31.38 billion and is part of the services sector and retail industry. Shares are up 5.1% year to date as of the close of trading on Thursday.

You can view the full Lowe's Companies Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

 

For more information on Lowe's Companies Inc. click any of the following:

• Lowe's Companies Inc. Stock Price

• Lowe's Companies Inc. Analyst Ratings

• Lowe's Companies Inc. Key Stats & Profile

• Lowe's Companies Inc. Earnings

• Lowe's Companies Inc. Ratio Comparison

• Lowe's Companies Inc. Growth Rates

• Lowe's Companies Inc. Balance Sheet

• Lowe's Companies Inc. Cash Flow

• Lowe's Companies Inc. Income Statement