Lowe’s Companies (NYSE:LOW) was trading/closed in the red for the eighth consecutive day on Wednesday. It was down 0.96% to $237.59.
The company began its downward trajectory on September 29 after SA analyst Seeking Profits downgraded the stock to Sell from Hold. The analyst noted that the shares were trading above 20x earnings, reflecting full valuation and limited upside.
“With muted residential construction, tariff risks, and mixed consumer sentiment, the potential good news is already priced in, presenting meaningful downside risk,” they said.
The stock closed 1.48% lower at $253.32 following the downgrade. Between September 29 and October 7, the stock lost 5.3%. On a YTD basis, it has lost 3.5%.
As per Seeking Alpha’s quant ratings, it is recommended to Hold the stock. It has a score of 3.18 out of 5, with an A+ grade for profitability but a D for growth. Seeking Alpha analysts share the consensus rating of Hold.
However, Wall Street analysts have a Buy call for the stock. 21 analysts rated it Buy and above, 13 had Hold recommendations, while 1 had a Sell call.
Earlier in September, ABI Invest issued a Buy call for LOW, expecting it to register benefits from sequential comp sales momentum, Fed rate cuts, expanding Pro market penetration, the FBM acquisition, strong digital adoption, and new store openings.
“Valuation looks attractive with the stock trading at a discount to Home Depot (HD) despite a fairly similar growth setup. That relative gap, paired with what feels like a more transformative growth story ahead, tilts the risk/reward in Lowe’s favor,” the author said.