This is Why Lowe’s Stock Was Rising on Monday

Lowe's Stock NYSE:LOW

Lowe’s Stock (NYSE:LOW)

Immediately following the opening bell on Monday, shares of Lowe’s Companies (NYSE:LOW) were trading up slightly, with gains of up to 2.1%. After opening the day at $192, shares of the home improvement store were up approximately 1% by 2 p.m. E.T., bringing the price to $194.

At 1:30 p.m. E.T., the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite were all up by roughly 0.1%.

What’s the Reason?

On Monday, the price of Lowe’s stock might have been affected by several variables. For example, the National Association of Home Builders/Wells Fargo Housing Market Index, announced on Monday, decreased for the ninth consecutive month, dropping 3 points to 46. A reading above 50 implies an optimistic forecast for home sales, while a reading below 50 indicates a pessimistic one.

However, even if home sales are down, it may lead to an increase in the number of people opting to improve their homes rather than sell them, which is good news for Lowe’s stock. Rising interest rates, however, could stifle such growth if they discourage homeowners from taking out loans to finance the necessary upgrades. Even more so now, the Federal Reserve is scheduled to convene this coming Tuesday and Wednesday and is widely expected to raise interest rates to curb inflation.

KeyBanc analyst Kenneth Zener upgraded several major homebuilders, including D.R. Horton (DHI), Lennar (LEN), PulteGroup (PHM), Meritage Homes (MTH), and TopBuild (BLD), to overweight from sector weight, which more than offset the possible drawbacks. Toll Brothers (TOL) and K.B. Home (KBH) are two others that were upgraded from underweight to sector weight. The KeyBanc analyst said that the housing market would recover more quickly than the overall market because of the market’s positive relative performance despite the increase in interest rates. This may be good news as Lowe’s Companies (NYSE:LOW) profits from the construction industry.

What’s Next?

The Federal Reserve Board is holding a meeting this coming Tuesday and Wednesday, and a rate hike is widely expected. This might be an eventful week for Lowe’s Companies (NYSE:LOW). Furthermore, Lowe’s stock investors should keep an eye on earnings reports from KeyBanc upgraded Lennar Corp. and K.B. Home, which are scheduled for release on Wednesday.

On Thursday, Costco (NASDAQ:COST), a major box store retailer, will disclose its profits, which may serve as a leading indicator for the industry.

Featured Image-  Megapixl @ Hisdx15

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About the author: I'm a financial journalist with more than 1.5 years of experience. I worked for different financial companies and covered stocks listed on ASX, NYSE, NASDAQ, etc. I have a degree in marketing from Bahria University Islamabad Campus (BUIC), Pakistan. I love to write about marketing and finance. Other than that, I like spending time in the gym and playing PC games.