Editor's Note: 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.
NEW YORK (
) 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 solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- Compared to its closing price of one year ago, LOW's share price has jumped by 51.54%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, LOW should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- LOWE'S COMPANIES INC reported flat earnings per share in the most recent quarter. 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 ($1.66 versus $1.42).
- LOW, with its decline in revenue, underperformed when compared the industry average of 11.5%. Since the same quarter one year prior, revenues slightly dropped by 2.0%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Specialty Retail industry and the overall market, LOWE'S COMPANIES INC's return on equity is below that of both the industry average and the S&P 500.
- LOW's debt-to-equity ratio of 0.65 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.25 is very low and demonstrates very weak liquidity.
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 19.2, below the average retail industry P/E ratio of 19.3 and above the S&P 500 P/E ratio of 17.7. Lowe's Companies has a market cap of $33.28 billion and is part of the
industry. Shares are up 15% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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