ISI Group Reiterates Buy Rating, $47 PT on Lowe's Companies Following Orchard Supply Purchase

In a report published Monday, ISI Group analyst Greg Melich reiterated a Buy rating and $47.00 price target on

. In the report, ISI Group noted, “Lowe's agreed to purchase Orchard Supply, a California hardware store, for $205mn plus payables that were ~$50mn at year end. While this is a different store format for LOW, this acquisition will provide it with a hardware-store format in an market with greater population density where it is currently underpenetrated compared to its peers. Out of bankruptcy, LOW would acquire at least 60 of Orchard's 91 stores in California. LOW currently has 110 stores or 6% of its store base in CA, HD has 232 stores of 11% of its base, while Sears has 80 stores or 10% of its base in CA.” Lowe's Companies closed on Friday at $41.16.