Home Improvement Stock Falls Lower on Downgrade

The firm also adjusted its price target to $180 from $185

Assistant Editor
Sep 18, 2020 at 10:25 AM
facebook twitter linkedin


The shares of Lowe's Company Inc (NYSE:LOW) are down 1.2% at $161.69, after Oppenheimer downgraded the stock from "outperform" to "perform," with a price-target cut to $180 from $185. The firm downgraded sector peer Home Depot (HD) as well, noting that home improvement stores' recent outsized gains could reflect a demand pull going forward. With that being said, the analyst in coverage sees modest upside for the shares in the long term.

On the chats, LOW has been repeatedly rejected by the $171 level as of late, but not before acquiring a fresh Sept. 16 all-time high of $171.72. Now seeing pressure from the 20-day moving average, the equity is on track for its first monthly loss in six, though it does remain up 35% year-to-date.

Coming into today, 18 analysts carry a "buy" or better rating on Lowe's stock, with the remaining three at a lukewarm "hold." Meanwhile, the 12-month consensus price target of $181.31 is a 10.7% premium to current levels, indicating an overall sense of optimism from covering firms. 

The options pits are also looking overwhelmingly bullish. LOW's 50-day call/put volume ratio of 2.59 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than all other readings in its annual range. This means long calls are being picked up at their fastest rate in a year.  

Options look like a good way to go when weighing in on Lowe's stock as well, as it is currently seeing attractively priced premiums. The stock's Schaeffer's Volatility Index (SVI) of 33% sits higher than 14% of readings in its annual range, suggesting short-term options are pricing in relatively low volatility expectations.

 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Master Portfolio Trial
 


 


 
Special Offers from Schaeffer's Trading Partners