Citigroup Reiterates Neutral, $24 Target on Lowe's

Citigroup maintains it Neutral rating and $24 target price on Lowe's Companies Inc. (NYSE: LOW) as the company keeps improving by but upside is limited by lack of business inflation.

Citi says, “We were encouraged to see an improved outlook for EPS growth (+23.8% average annual growth vs. last year guidance of +20%), and EBIT (+70bps average/year, LT of 10% by 2015). … We continue to expect for the first half of the year gross margin pressure from EDLP changes and a gap in comp vs. its main competitor HD, as LOW slowly rolls out its merchandising changes. We don't expect an inflection in the business for at least another 3 to 4 quarters, which will temper any upside in the stock in our view.”

LOW closed at $24.77 per share on Tuesday.