Market Overview

Wedbush Upgrades Lowe's, Says It Can Win From Low Interest Rates

Share:
Wedbush Upgrades Lowe's, Says It Can Win From Low Interest Rates
Related LOW
Scott Bauer's Lowe's Options Trade
One Chart That Shows How Amazon Is Simplifying Sears' Appliance Purchase, Installation Process
Lowe's: A Retail Gem At A Great Price (Seeking Alpha)
Related SHLD
Sears' Post-Earnings Move Shows Why Sentiment Can Matter More Than Earnings
Is It Time To Remove General Electric From The Dow 30?
Postponing Debt, More Liquidity Doesn't Solve Sears' Problem (Seeking Alpha)

In a report published Monday, Wedbush analyst Seth Basham upgraded the rating on Lowe's Companies, Inc. (NYSE: LOW) from Neutral to Outperform, while raising the price target from $80 to $82. The analyst expects the positive drivers for the company to continue, if not increase, going forward.

"LOW is harvesting benefits from years of investments and benefitting from increasing share loss at Sears Holdings Corp. (NASDAQ: SHLD) and macro tailwinds. Barring a spike in interest rates, we believe these positive drivers should persist, if not intensify, with notable underappreciated benefits from an easing credit environment to housing and home improvement," Basham explained.

In addition, the lower than expected earnings reported for 1Q15 drove a pullback in the stock, offering an attractive entry point for investors, especially given that the company is expected to narrow the comp gap with Home Depot, Inc. (NYSE: HD) in the near future. This, the analyst believes, has historically been a sign of outperformance.

"Moreover, LOW's earnings should move significantly faster than HD's in the next three years if LOW can meet its guidance, pointing to the potential for a premium valuation vs. HD compared to the current discount levels," the Wedbush report suggested.

In addition, the analyst expressed optimism regarding Lowe's Companies' internal initiatives to boost sales and margins, with a special focus on labor optimization.

Latest Ratings for LOW

DateFirmActionFromTo
Dec 2017GuggenheimInitiates Coverage OnBuy
Dec 2017Moffett NathansonInitiates Coverage OnBuy
Nov 2017Atlantic EquitiesDowngradesOverweightNeutral

View More Analyst Ratings for LOW
View the Latest Analyst Ratings

Posted-In: Seth BashamAnalyst Color Long Ideas Upgrades Top Stories Economics Analyst Ratings Trading Ideas Best of Benzinga

 

Related Articles (HD + LOW)

View Comments and Join the Discussion!