Something to Snack On: Amazon (AMZN) Drills Lowe's (LOW)

Consumer Discretionary

R5 Capital

Amazon ran steep tool discounts over the holiday, highlighting Lowe’s pricing disadvantage. Across 25 items from brands like Bosch and Dewalt, Lowe’s averaged 27.5% higher prices; 15 items were cheaper on Amazon with average discounts of 34.6%, while only one was cheaper at Lowe’s. This follows R5's year-long observation that Lowe’s prices exceed Walmart’s on common goods. The wide gap raises concerns about Lowe’s gross margins and potential sales/earnings headwinds, even if housing improves. Meanwhile, Amazon’s aggressive pricing supports volume growth and advertising profits—a positive for AMZN but a structural challenge for broader retail.

- 05 September, 2025

What’s the right beta for your portfolio?

Trivariate Research

Trivariate analysed the top 500 US equities for five factors beyond the market: size (top 100 vs. 401-500), growth vs. value, high-quality vs. junk, liquidity and momentum. They focused on 3 different portfolios (min-vol, max-Sharpe, max-return) to show a range of outcomes. Over the last 20 years, the “efficient frontier” or optimal beta for a median portfolio appears to be between 0.95 and 1. If you are looking to lower your portfolio beta efficiently, owning high-quality value stocks with relatively low liquidity is a prudent strategy (e.g. Exxon Mobil, Philip Morris, Lowe’s, Medtronic). If you want to take more risk, the optimal factor loadings would be to add to highly liquid growth stocks that are junk quality (e.g. Tesla, Applovin, Micron).

- 07 February, 2025

Lowe’s (LOW)

Consumer Discretionary

Verbatim Advisory Group

Aug sales trends are weaker than both Jul and 2Q24 trends, according to Verbatim’s latest channel checks. Customers are exercising caution due to economic uncertainty driven by a weak economy and the upcoming elections. To counter this, LOW’s is offering promotional deals and enhancing customer service. Last month’s bestselling products were Halloween related, as well as patio furniture and appliances. Verbatim’s Aug Comp Estimate is -5.5% vs. 2Q24 Actual Comp of -5.1%. Click here to access the full report.

- 06 September, 2024

Home Depot (HD) & Lowe’s (LOW)

Consumer Discretionary

Gordon Haskett Research Advisors

GHRA’s 3-factor predictive model points to upside potential to their 4Q23 SSS estimates for HD and LOW. Based on the weighted average results from their 1) Home Improvement Leading Indicator; 2) Home Improvement Supplier Model; and 3) Footfall traffic data, GHRA believes there could be upside to their estimate for HD of -2.0% (vs. predictive model of -1.4%) and LOW of -5.0% (vs. -3.5%). GHRA is bullish on both stocks, but leans more favourably towards HD given its significantly higher PRO penetration (as DIY faces steeper headwinds while PRO backlogs remain healthy); accelerating store growth; and incremental $500m of cost savings in FY24 that help mitigate EPS downside.

- 09 February, 2024