5 Cheap Retail Stocks to Buy

4. Lowe’s Companies, Inc. (NYSE:LOW)

Number of Hedge Fund Holders: 68

One-Year Average Price Estimate: $229

With a solid dividend growth history and robust business, Lowe’s Companies, Inc. (NYSE:LOW)’s has long-term growth potential, according to analysts. Lowe’s Companies, Inc. (NYSE:LOW)’s one-year average analyst price target is $229, while its stock price as of April 4 was around $200.

Recently, Evercore ISI added the stock to its Core Ideas List. Lowe’s Companies, Inc. (NYSE:LOW) also featured on Bank of America’s US 1 List, which represents BofA’s best investment ideas for the long term.

At the end of the fourth quarter of 2022, 68 hedge funds had stakes in Lowe’s Companies, Inc. (NYSE:LOW), according to Insider Monkey’s database of 943 hedge funds. This makes Lowe’s Companies, Inc. (NYSE:LOW)’s one of the most popular retail stocks among elite hedge funds.

Baron Funds made the following comment about Lowe’s Companies, Inc. (NYSE:LOW) in its Q3 2022 investor letter:

“Lowe’s Companies, Inc. (NYSE:LOW) is the second-largest home improvement center in the U.S. The company has several competitive advantages including scale, distribution efficiencies, interconnected retail through stores/internet, excellent management, and a strong balance sheet. The company is valued at only 14 times estimated earnings per share versus its long-term average P/E multiple of approximately 18 times estimated earnings per share.

The shares of Lowe’s Companies, Inc. increased 7% in the most recent quarter following better better-than-expected quarterly business results. Lowe’s is the second largest home improvement center in the U.S. The company has several competitive advantages including scale, distribution efficiencies, interconnected retail through stores/internet, excellent management, and a strong balance sheet. We believe the shares are attractively valued at only 14 times estimated earnings per share versus a long-term average P/E multiple of approximately 18 times estimated earnings per share.”