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Investing.com - JPMorgan has raised its price target on Lowe’s (NYSE:LOW) to $283.00 from $280.00 while maintaining an Overweight rating on the home improvement retailer’s stock. The stock, currently trading at $257.14 with a market capitalization of $144.49 billion, appears overvalued according to InvestingPro’s Fair Value model.
The firm cited Lowe’s ongoing self-help initiatives for both top-line growth and margin improvement as the company works to narrow the performance gap with competitor Home Depot (NYSE:HD). With annual revenue of $83.24 billion and a healthy gross profit margin of 33.36%, the company maintains a GOOD financial health score according to InvestingPro analysis.
JPMorgan highlighted the "duopoly/Amazon-resistant nature" of the home improvement industry and pointed to a strong long-term industry backdrop driven by housing factors that support a premium valuation for Lowe’s. The company’s strength is further evidenced by its 41-year streak of dividend increases, with a current yield of 1.87%.
The analysis noted that the home improvement market appears biased to the upside, as existing home sales continue to hover around 40-year lows and previous share-of-wallet headwinds are now behind the sector.
JPMorgan also mentioned potential upside optionality from Federal Reserve interest rate cuts, which could provide additional support for the home improvement retailer’s business.
In other recent news, Lowe’s has garnered attention with several analyst updates following its recent performance and strategic moves. The company reported a 4.7% growth in domestic comparable sales for July, surpassing Home Depot’s 3.3% growth. This performance has led to multiple analysts revising their price targets for Lowe’s stock. Barclays (LON:BARC) raised its price target to $267, citing benefits from Lowe’s acquisitions of Architectural Digest Group and Foundation Building Materials (NYSE:FBM). Wells Fargo (NYSE:WFC) increased its target to $290, noting a strong second quarter and strategic expansion into the Planned Pro segment. RBC Capital adjusted its target to $260, anticipating the impact of the FBM acquisition on future financials. Mizuho (NYSE:MFG) maintained an Outperform rating with a $280 target, emphasizing growth in the professional segment. Lastly, Bernstein SocGen Group raised its target to $279, highlighting potential growth opportunities in the Pro market.
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