We have maintained our long-term Neutral recommendation on
Lowe's Companies Inc
) with a target price of $41.00.
Why the Reiteration?
Being the world's second largest home improvement retailer,
Lowe's remains well positioned to benefit from the housing market
recovery. The company is closing underperforming stores and its
strategy of enhancing customer-shopping experience and
merchandising transformation is likely to help it generate
incremental sales. Moreover, the company's sustained focus on
price management and adding extra labor hours will help boost its
Giving itself a new face lift, Lowe's came up with a new tag
line "Never Stop Improving", manifesting its new brand strategy
and endeavor toward improving and developing innovative ideas.
The company also launched an online tool, "MyLowes", to aid
consumers better manage their homes and other remodeling
projects. We believe these initiatives would give it a
competitive advantage over its peers.
Planning ahead, this Zacks Rank #3 (Hold) company is expanding
into high-growth markets, which bring significant opportunities
to improve its top line and profitability.
However, we maintain our Neutral recommendation on Lowe's as
spending on big remodeling projects will likely remain under
pressure until the housing market stabilizes, inventory levels
normalize and consumer-spending rebounds.
Other Stocks to Consider
Until any further upgrade on Lowe's Zacks Rank, other stocks
worth considering in the retail/wholesale sector include
Fortune Brands Home & Security, Inc
Haverty Furniture Companies Inc.
Restoration Hardware Holdings, Inc
) all of which hold a Zacks Rank #1 (Strong Buy) and are
expected to continue with their upbeat performance.
FORTUNE BRD H&S (FBHS): Free Stock Analysis
HAVERTY FURNIT (HVT): Free Stock Analysis
LOWES COS (LOW): Free Stock Analysis Report
RESTORATION HDW (RH): Free Stock Analysis
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