Lowe's Stock Topples Key Trendline After Beat-and-Raise

LOW fell below its 200-day moving average for the first time in nearly a year on Tuesday

Deputy Editor
Feb 23, 2022 at 10:02 AM
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The shares of Lowe's Companies Inc (NYSE:LOW) are up 5.5% at $226.16 this morning, following the company's well-received fourth-quarter report. The retailer posted profits of $1.78 per share on $21.34 billion in revenue, topping analysts' estimates. Lowe's also said its sales rose 5% for the quarter, and lifted its full-year forecast, citing the current state of the real estate market and strong sales among home professionals. 

The stock fell yesterday following top competitor Home Depot's (HD) post-earnings selloff, though most of this negative price action was captured by the $210 level, which is also home to LOW's May and September highs. The equity did find itself back below the 200-day moving average for the first time since March 2021, though today's pop has the stock back above this trendline. In the past 12 months, the equity has tacked on roughly 33.5%. 

There's not been a peep from the brokerage bunch, but most analysts in coverage were bullish heading into today. Of the 21 in coverage, 16 call the stock a "buy" or better. Plus, the 12-month consensus price target of $278.33 is a 29.7% premium to last night's close. 

Options traders took a more bearish stance ahead of Lowe's earnings event. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), LOW sports a 10-day put/call volume ratio of 2.04, which stands higher than 96% of readings from the past year. This means options traders have been picking up long puts at a much quicker-than-usual clip. 

This bearishness is being echoed in today's trading, where 8,229 puts have exchanged hands, nearly double the 4,144 calls exchanged during the first half hour of trading. Overall volume is running at 10 times the intraday average, and the weekly 2/25 212.50-strike put is the most popular, with positions being opened here. 

 




 
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