Morgan Stanley Raises Lowe's Price Target Following Earnings

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On Wednesday, Morgan Stanley analysts raised the price target on Lowe’s Companies, Inc. LOW from $62 to $64 and maintained the Equal-weight rating following the company’s third-quarter results.

For the company’s Q3 2015 results, Lowe’s reported EPS and revenue above Street expectations and raised FY2014 EPS guidance.

Simeon Gutman stated, “LOW’s Q3 EPS were in-line. Comps were stronger but GM contracted 10 bps. Still, the better comp and that EPS rose 25% YoY should trump the slight GM miss.”

In addition, the strong comparable store data points to the lowest comp spread between Lowe’s and Home Depot in four years. Gutman stated, “This bodes well for LOW as the housing recovery continues and suggests that recent sales and merchandising initiatives are paying of.”

Lastly, Gutman feels the company seems to be on track for at least high teens EPS growth to continue.

Shares of Lowe’s recently traded at $61.86, up 5.7 percent.

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Posted In: Analyst ColorPrice TargetAnalyst RatingsMorgan StanleySimeon Gutman
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