TD Cowen on Lowe's (LOW): 'Acquisition Signals The Next Chapter Of Pro Growth'

TD Cowen analyst Max Rakhlenko reiterated a Hold rating and $270.00 price target on Lowe's (NYSE: LOW).

The analyst commented: "Acquisition Signals The Next Chapter Of Pro Growth; LOW's acquisition of Artisan Design Group will allow the company to both enter the new home industry and the distribution channel which will grow its TAM by $50bn. ADG is a leader in its segments with a history of strong execution and we think valuation is modest, but will face tariff risk and structural challenges which could continue to pressure the new home market.

Strategically, LOW now enters the Pro planned purchase market and expands the company's TAM by $50bn. The acquisition also signals LOW's long-term belief in the new home market as the U.S. is significantly under-built and mgmt expects strong growth over the cycle. Note, ADG grew both organically and through M&A and is now a leader in its verticals with a strong national presence across 18 states and 132 distribution, design, and service facilities including the fast growing sun belt region. LOW noted ADG has strong relationships with the top home builders and a best-in-class sales model and customer service. Ahead, we expect ADG to remain acquisitive in both in its current verticals and for LOW to turn the company into a platform for broader expansion into additional verticals. That said, in the near-term, the acquisition does come with tariff risk across the categories alongside a new housing market which faces challenges."

For an analyst ratings summary and ratings history on Lowe's click here. For more ratings news on Lowe's click here.

Shares of Lowe's closed at $224.14 yesterday.

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