BofA warns Fed risks policy mistake with early rate cuts
Investing.com - Bernstein SocGen Group raised its price target on Lowe’s (NYSE:LOW) to $279.00 from $266.00 on Thursday, while maintaining an Outperform rating on the home improvement retailer’s stock. Currently trading at $257.14, the stock has shown strong momentum with an 8.7% return over the past six months. According to InvestingPro analysis, the stock appears to be trading near its Fair Value.
The firm expressed surprise at the timing of Lowe’s move into the complex Pro market, noting the company still has "low-hanging growth opportunities" in the simple Pro segment and lacks in-house capabilities to serve complex Pro customers.
Bernstein analysts speculated the accelerated timeline for Lowe’s complex Pro strategy might be influenced by competitors Home Depot (NYSE:HD) and QXO actively acquiring specialty trade distributors and suppliers.
The research firm indicated it continues to prefer Lowe’s over Home Depot over the next 12-18 months, citing an all-time high multiples gap between the two retailers since the 2010s.
Bernstein expects this gap to narrow as Lowe’s reduces its margin differential with Home Depot through cost savings and leverages its more cyclical business when demand rebounds.
In other recent news, Lowe’s has captured investor attention with several significant developments. The company announced a nearly $9 billion acquisition of Foundation Building Materials (NYSE:FBM), a major player in wallboard distribution. This move has prompted multiple analysts to adjust their price targets for Lowe’s stock. DA Davidson raised its target to $266, citing improved comparable sales and positive second-half guidance. Morgan Stanley (NYSE:MS) also increased its price target to $270, highlighting the acquisition’s potential upside. UBS went further, raising its target to $325, driven by Lowe’s second-quarter results and improvements in the DIY segment. Truist Securities adjusted its target to $283, noting solid second-quarter performance with better-than-expected margins. These updates reflect a positive outlook from analysts, with many maintaining or upgrading their ratings on Lowe’s stock.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.