August 22, 2024
Top 10 Stock Lowe's Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Lowe's – Top 10 Stock in SDG 15: Life on Land
Lowe's is listed as a top 10 stock on August 22, 2024 in the market index SDG 15 because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 43 (43% performer), Obermatt assesses an overall hold recommendation for Lowe's on August 22, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Home Improvement Retail |
| Index | Human Rights, SDG 11, SDG 12, SDG 15, SDG 7, SDG 8, S&P US Luxury, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Lowe's Hold
| 360 METRICS | August 22, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 64 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 29 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 22 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 62 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 43 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 43 (better than 43% compared with alternatives), overall professional sentiment and financial characteristics for the stock Lowe's are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Lowe's. The consolidated Value Rank has an attractive rank of 64, which means that the share price of Lowe's is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 64% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 62, which means that professional investors are more optimistic about the stock than for 62% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 29, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 22, meaning the company has a riskier financing structure than 78 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 43, Lowe's is worse than 57% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 64) and positive market sentiment in the professional investor community (Sentiment Rank of 62), but growth expectations are below-average (Growth Rank of 29) and the financing structure is on the risky side(Safety Rank of 22). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of Lowe's is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for Lowe's positive
ANALYSIS: With an Obermatt Sentiment Rank of 62 (better than 62% compared with alternatives), overall professional sentiment and engagement for the stock Lowe's is above average. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for Lowe's. Analyst Opinions are at a rank of 52 (better than 52% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. The Professional Investors rank is also good at 66, which means that currently, professional investors hold more stock in this company than in 66% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 84 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 84% of competitors). But Analyst Opinions Change has a below-average rank of 23, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in Lowe's. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 62 (more positive than 62% compared with investment alternatives), Lowe's has a reputation among professional investors that is above-average compared with that of its competitors. This is an early sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it might just materialize in the future. ...read more
Value Strategy: Lowe's Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 64 (better than 64% compared with alternatives), Lowe's shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Lowe's. Expected dividend yields are higher than for 76% of comparable companies (a Dividend Yield rank of 76), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 91, which means that the stock price is lower compared with invested capital than for 91% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 19 which means that the stock price compared with what market professionals expect for future profits is higher than for 81% of comparable companies, indicating a low value concerning Lowe's's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Lowe's with a rank of 39. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 61% of comparable companies, indicating a low value concerning Lowe's's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 64, is a buy recommendation based on Lowe's's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, Lowe's may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. ...read more
Growth Strategy: Lowe's Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 29 (better than 29% compared with alternatives), Lowe's shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Lowe's. Sales Growth has a below market rank of 25, which means that, currently, professionals expect the company to grow less than 75% of its competitors. The same is valid for Capital Growth, with a rank of 33, and Profit Growth, with a rank of 42. Currently, professionals expect the company to grow its profits less than 58% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 64, which means that the stock returns have recently been above 64% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 29, is a hold recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Lowe's, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: Lowe's Debt Financing Safety risky
| SAFETY METRICS | August 22, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 3 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 26 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 72 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 22 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 22 (better than 22% compared with alternatives), the company Lowe's has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Lowe's is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Lowe's. Liquidity is at 72, meaning the company generates more profit to service its debt than 72% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 26, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 74% of its competitors. Leverage is also high at a rank of 3, which means that the company has an above-average debt-to-equity ratio. It has more debt than 97% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 22 (worse than 78% compared with alternatives), Lowe's has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Lowe's Lowest Financial Performance
| COMBINED PERFORMANCE | August 22, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 64 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 29 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 72 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 23 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 23 (worse than 77% compared with investment alternatives), Lowe's (Home Improvement Retail, USA) shares have lower financial characteristics compared with similar stocks. Shares of Lowe's are a good value (attractively priced) with a consolidated Value Rank of 64 (better than 64% of alternatives) but show below-average growth (Growth Rank of 29), and are riskily financed (Safety Rank of 22), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 23, is a sell recommendation based on Lowe's's financial characteristics. As the company Lowe's's key financial metrics exhibit good value (Obermatt Value Rank of 64) but low growth (Obermatt Growth Rank of 29) and risky financing practices (Obermatt Safety Rank of 22), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 64% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.