Analysts Blast Lowe's Stock After Buyback Buzz

Loop Capital said Lowe's stock is "attractively priced"

Deputy Editor
Dec 13, 2018 at 10:27 AM
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The shares of Lowe's Companies, Inc. (NYSE:LOW) rallied nearly 3% yesterday -- and today, are up 0.4% at $92.46 -- after the company unveiled a new share buyback program at its annual analyst day. The brokerage bunch was quick to chime in, too. RBC and Stifel raised their respective price targets to $105 and $96, while Loop Capital reiterated its "buy" rating, saying the "shares of Lowe's are attractively priced." SunTrust Robinson, however, slashed its target price to a still lofty $128 from $138.

Analysts are generally optimistic about the home improvement retailer, with a majority 20 of 24 analysts calling LOW a "buy" or better, and not one "sell" rating on the books. Plus, the average 12-month price target of $111.54 is a 20.8% premium to current trading levels.

This week's upside has LOW within striking distance of its year-to-date breakeven mark of $92.94. However, the shares are still well off their all-time high of $117.70 from Sept. 28. Since this peak, the stock has shed 21% under pressure from its 30-day moving average, with a recent rally halted by its 200-day moving average. 

Traders have been growing increasingly skeptical in recent months. The equity sports a 50-day put/call volume ratio of 1.11 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 96th percentile of its annual range. This indicates that in the past two weeks, traders have bought to open puts over calls at a quicker-than-usual clip.

 

 


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