Lowe's Companies (LOW) Weak In Early Morning Trading

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Lowe's Companies ( LOW) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Lowe's Companies as such a stock due to the following factors:

  • LOW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $316.8 million.
  • LOW traded 13,008 shares today in the pre-market hours as of 9:25 AM.
  • LOW is down 2.2% today from Friday's close.

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More details on LOW:

Lowe's Companies, Inc. operates as a home improvement retailer. It offers products for maintenance, repair, remodeling, and home decorating. The stock currently has a dividend yield of 1.5%. LOW has a PE ratio of 22.8. Currently there are 9 analysts that rate Lowe's Companies a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Lowe's Companies has been 6.7 million shares per day over the past 30 days. Lowe's Companies has a market cap of $50.4 billion and is part of the services sector and retail industry. The stock has a beta of 1.11 and a short float of 1.9% with 3.00 days to cover. Shares are down 3.5% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Lowe's Companies as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue growth, notable return on equity, increase in net income and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • LOWE'S COMPANIES INC has improved earnings per share by 34.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, LOWE'S COMPANIES INC increased its bottom line by earning $1.68 versus $1.42 in the prior year. This year, the market expects an improvement in earnings ($2.17 versus $1.68).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.7%. Since the same quarter one year prior, revenues slightly increased by 7.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 26.1% when compared to the same quarter one year prior, rising from $395.00 million to $498.00 million.
  • 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. Compared to other companies in the Specialty Retail industry and the overall market on the basis of return on equity, LOWE'S COMPANIES INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The strong earnings growth this company has enjoyed -- up -- has apparently played a role in driving up its share price by a solid 27.11%. In addition, the rise in the general market has likely contributed to this stock's strong performance during this past year.Looking ahead, the stock's sharp 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 other strengths this company displays justify these higher price levels.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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