Lowe’s Companies Share Price Forecast September 2021 – Time to Buy LOW?

Shares of American retail company Lowe’s Companies (NYSE: LOW)  are in the red today after closing at $207.87 as of September 26^th (20:53 UTC-4). Lowe’s, which has always been known as a dividend king has demonstrated its status as a high-quality business for decades now. It is positioned to grow even when the U.S. and world is coming out of the pandemic. The shares are still attractively priced despite this year’s rally, which has caught the eye of many investors.

Lowe’s Companies – Technical Analysis

According to the financial statement from Lowe’s Companies, the market cap of the company is at $143.936 billion with total assets worth $49.404 billion. Revenue for 2020 was at $89.60 billion with a profit margin of 6.49% compared to $72.15 billion in 2019.

Moving averages such as Exponential Moving Average (10)( 206.95), Simple Moving Average (10)(206.96), Exponential Moving Average (20)(205.37) and Simple Moving Average (20)(205.83) are pointing towards a buy action. Oscillators such as Relative Strength Index (14)(57.50), Stochastic %K (14, 3, 3)(64.44), Commodity Channel Index (20)(95.05) and Average Directional Index (14)(15.81) are neutral..

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Recent Developments

Lowe’s Companies is sometimes known as the dividend king because of its ability to reward shareholders with steady payouts. It has experienced 59 consecutive years of dividend increases,, making it one of only 30 companies to achieve this feat. The company performed well even as consumers stayed home to slow the spread of the coronavirus. The pandemic acted like fuel to the fire for a company already enjoying the fruits of favourable demographics (i.e., more millennials buying homes and investing in their homes with renovations).

As a result. Net sales increased to $89.6 billion in fiscal 2020, compared to $72.1 billion in fiscal 2019. The company’s net margin also increased to 6.5% last year. It delivered consistently good results through the first half of fiscal 2021, dispelling many of the doubts that analysts had. It grew an astonishing 11% year over year and a strong earnings growth of 36% which was fuelled by higher sales, expanding margins, and a reduced share count.

Should You Buy LOW Shares?

Investors interested in LOW should look at the existing home-sales market which declined only 2% from July to August. However, the housing market remains the same as the median price of an existing home sold last month increased 14.9% year over year to $356,700. This was largely caused by a lack of supply pricing out many first-time home buyers and contributed to the decline in sales. Permits for new residential buildings increased 6% from July to August, reaching over 1.7 million. As there is a shortage of 3.8 million single-family homes in the U.S, demand for Lowe’s will only increase.

While the company has a strong operating result, a lot of investors are concerned about whether it will hold up if the housing market suddenly crashes. The company has $24.3 billion in debt and $6.3 billion in cash and short-term investments in its balance sheet which may appear as a red flag at first. However, if we take a look at the interest coverage ratio which represents the extent to which a company can cover its interest expenses with earnings before interest and taxes, we get a better picture. The company has a lot of breathing room on its balance sheet which protects it from worsening market conditions. In conclusion, Lowe’s is positioned for further improvement in the years ahead with handsome rewards for all its investors. Considering this now is the right time to buy LOW shares.

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