Oppenheimer Reiterates Perform Rating, $46 PT on Lowe's Companies Following Orchard Supply Purchase

In a report published Monday, Oppenheimer analyst Brian Nagel reiterated a Perform rating and $46.00 price target on Lowe's Companies LOW. In the report, Oppenheimer noted, “We look less than favorably upon the announcement from LOW that it plans to purchase stores from Orchard Supply Hardware. For the past couple of years, LOW has been working to improve merchandising and operational controls within its core home improvement superstores. A strengthening housing market in the US has helped to fuel better trends at the chain. Evidence of success with the company's internal initiatives has, however, proven elusive. We are concerned that synergies with Orchard Supply Hardware are minimal at best and that the acquisition and integration of these units will prove a new distraction for LOW. Our rating on LOW is Perform.” Lowe's Companies closed on Friday at $41.16.