Jefferies Cuts Estimates on Lowe's (LOW) Following Weak Market Trends

Jefferies is reiterating its Buy rating and $30 price target on shares of Lowe's (NYSE: LOW), but is lowering its estimates due to a slower rebound in the seasonal businesses.

While the month of May showed much improvement in demand over the month of April, sales trends are still below expectations and seasonal norms. The firm is lowering its Q2 comp store sales estimate by roughly a point to 2 percent. It is also reducing its Q2, FY12, and FY13 EPS estimates by $0.03 to $0.67, $1.67, and $1.89.

Jefferies comments that Scotts Miracle -Gro's (NYSE: SMG) negative update on the quarter following the close of the market yesterday shows the slowing demand that Lowe's is currently experiencing. Outdoor sales represent about 35-38 percent of the company's total sales.

An analyst at Jefferies reports, "we still prefer Home Depot (NYSE: HD) shares over Lowe's on weakness, but believe housing data points should improve as we lap the affects of government stimulus a year ago."

For more ratings news on Lowe\'s click here and for the rating history of Lowe\'s click here.

Shares of Lowe\'s closed at $22.72 yesterday.

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