Mizuho reiterates outperform rating on Lowe’s stock amid challenges

Published 13/06/2025, 12:32
Mizuho reiterates outperform rating on Lowe’s stock amid challenges

Mizuho (NYSE:MFG) maintained its Outperform rating and $280.00 price target on Lowe’s (NYSE:LOW), a prominent player in the Specialty Retail industry with a "GOOD" overall financial health score according to InvestingPro, following an investor meeting at the company’s Tech Hub in Charlotte, North Carolina. The meeting included Lowe’s Executive Vice President and CFO Brandon Sink and Senior Director of Investor Relations Aaron Yarger.

The home improvement retailer, which has maintained dividend payments for 55 consecutive years and currently offers a 2.15% yield, faces a "complex and evolving consumer backdrop," according to Mizuho. Sector pressures persist due to affordability issues, while tariff-related concerns could potentially delay recovery in the home improvement market.

Despite these challenges, Lowe’s continues to refine its business model with substantial progress in its professional customer segment. The company is also implementing Perpetual Productivity Improvement (PPI) initiatives to tighten its expense profile and advancing market delivery capabilities for appliances.

Lowe’s has been improving its digital and supply chain operations, with over 1,000 employees now working at its recently opened Tech Hub. These operational improvements represent part of the company’s strategy to navigate the current market environment.

Mizuho views owning Lowe’s shares as a "call option" given what it considers an attractive relative valuation. The firm’s maintained Outperform rating reflects confidence in the company’s strategic direction despite ongoing market headwinds.

In other recent news, Lowe’s Companies, Inc. reported several significant developments. The company finalized its acquisition of Artisan Design Group, a move aimed at enhancing its professional services and distribution channels within the interior finishes market. Lowe’s also announced a 4% increase in its quarterly dividend, raising it to $1.20 per share, which reflects the company’s confidence in its long-term growth strategy. In shareholder matters, Lowe’s held its annual meeting where all nominated directors were elected, and Deloitte & Touche LLP was ratified as the independent registered public accounting firm for fiscal 2025.

Analyst firms have also weighed in on Lowe’s recent performance. TD Cowen maintained a Hold rating with a $245 price target, expressing confidence in Lowe’s ability to manage market challenges, including tariffs. Conversely, Stifel adjusted its price target from $250 to $240, despite Lowe’s first-quarter results surpassing expectations. Stifel expressed concerns about the sustainability of Lowe’s sales growth and noted the impact of Home Depot (NYSE:HD)’s pricing strategies on Lowe’s profit margins. These developments provide a comprehensive view of Lowe’s current strategic initiatives and market positioning.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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