September 21, 2023
Top 10 Stock Lowe's Buy 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 7: Affordable and Clean Energy
Lowe's is listed as a top 10 stock on September 21, 2023 in the market index SDG 7 because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low. Based on the Obermatt 360° View of 73 (high 73% performer), Obermatt assesses an overall buy recommendation for Lowe's on September 21, 2023.
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 Buy
| 360 METRICS | September 21, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 52 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 65 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 11 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 98 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 73 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 73 (better than 73% compared with alternatives), overall professional sentiment and financial characteristics for the stock Lowe's are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Lowe's. The consolidated Value Rank has an attractive rank of 52, 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 the stock price is lower than for 52% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 65, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 98. But the company’s financing is risky with a Safety rank of 11. This means 89% of comparable companies have a safer financing structure than Lowe's. ...read more
RECOMMENDATION: With a consolidated 360° View of 73, Lowe's is better positioned than 73% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 52), above-average growth (Growth Rank of 65), and positive market sentiment in the professional investor community (Sentiment Rank of 98), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 11), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Lowe's is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Lowe's very positive
ANALYSIS: With an Obermatt Sentiment Rank of 98 (better than 98% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Lowe's is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Lowe's. Analyst Opinions are at a rank of 69 (better than 69% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 93, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Lowe's. The Professional Investors rank is 100, which means that currently, professional investors hold more stock in this company than in 100% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 81 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 81% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 98 (more positive than 98% compared with investment alternatives), Lowe's has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Lowe's stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Lowe's Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 52 (better than 52% 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 72% of comparable companies (a Dividend Yield rank of 72), 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 97, which means that the stock price is lower compared with invested capital than for 97% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 13 which means that the stock price compared with what market professionals expect for future profits is higher than for 87% 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 35. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 65% 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 52, 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 good
| GROWTH METRICS | September 21, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 28 |
|
||||||
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 60 |
|
||||||
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 59 |
|
||||||
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 73 |
|
||||||
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 65 |
|
||||||
ANALYSIS: With an Obermatt Growth Rank of 65 (better than 65% compared with alternatives), Lowe's shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Lowe's. Profit Growth has a rank of 60 which means that currently professionals expect the company to grow its profits more than 60% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 59, and Stock Returns has a rank of 73 which means that the stock returns have recently been above 73% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 28 (72% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 65, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Lowe's Debt Financing Safety risky
| SAFETY METRICS | September 21, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 3 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 24 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 47 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 11 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 11 (better than 11% 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 all three metrics below average for Lowe's. Liquidity is at 47, meaning that the company generates less profit to service its debt than 53% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 3, meaning the company has an above-average debt-to-equity ratio. It has more debt than 97% of its competitors. Finally, Refinancing is at a rank of 24 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 76% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 11 (worse than 89% compared with alternatives), Lowe's has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: Lowe's Below-Average Financial Performance
| COMBINED PERFORMANCE | September 21, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 52 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 65 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 47 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 36 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 36 (worse than 64% compared with investment alternatives), Lowe's (Home Improvement Retail, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Lowe's are a good value (attractively priced) with a consolidated Value Rank of 52 (better than 52% of alternatives), show above-average growth (Growth Rank of 65) but are riskily financed (Safety Rank of 11), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 36, is a hold recommendation based on Lowe's's financial characteristics. As the company Lowe's's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 52) and above-average growth (Obermatt Growth Rank of 65), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 11) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...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.