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LOW puts are executing 2.5 times as many call clips in the last 10 days
when I checked in at Lowe’s Companies (NYSE:LOW) early this month, home improvement retailers was in the process of selling its Canadian division of the business. Today, before the market opens, he talks about Lowe’s earnings report due on Wednesday, November 16th. Ahead of the event, options traders are taking downside positions.
Lowe’s has a rather muted history of post-earnings reaction. The stock has only risen 0.6% since his August report, and has averaged 3.6% overall post-earnings movement over the past two years. But this time, options markets are pricing him 7.9% higher than usual in trading next Wednesday.
At the last check, Lowe’s stock was up 9.3% to trade at $203.92, taking cues from the earthquake. Rise in US stocks today. LOW is heading towards its highest since Sept. 12 and poised to clear his 200-day moving average on a close price basis for the first time since Aug. 18. It offers a 0.6% dividend yield with a futures dividend of $1.96.
Additionally, the business is estimated to report revenue growth of 0.7% and profit growth of 12.4% in fiscal year 2023. Lowe’s is also expected to see a 6.4% increase in earnings in its fiscal year 2024, up 0.4% from his, indicating that the company’s performance is slowing. Top-line and bottom-line growth. The business previously reported a 7.4% increase in revenue and a 44.7% increase in net income for fiscal year 2022. Additionally, the business increased its revenue and net income by 35% and 264.5%, respectively, between fiscal years 2019 and 2022, making the LOW valuation very interesting from a long-term perspective.
Puts are much more popular than usual in options pits, according to LOW’s 10-day put/call volume ratio of 2.52 on the International Stock Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) there is. It ranks higher than 96% of measurements over the past year.
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