Oppenheimer downgraded LOW to “perform” from “outperform”

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.