UPDATE: Atlantic Equities Upgrades Lowe's (LOW) to Overweight, 'Significant margin upside'
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Atlantic Equities analyst Sam Hudson upgraded Lowe's (NYSE: LOW) from Neutral to Overweight with a price target of $240.00.
The analyst comments "Sentiment towards hardlines retail has inflected since the start of March, buoyed by government stimulus and optimism regarding the reopening. With the market now starting to look beyond tough FY21 comps, the sector's position as a structural Covid-19 winner is beginning to be appreciated. With the housing market also remaining supportive, we view Lowe's as well-positioned to continue its transformation and see the company reaching its 12% margin target in FY21 (consensus 11.5%). Importantly, and in contrast to consensus, we then expect momentum to continue and see the 13% margin target being achieved in FY23 (consensus 12.0%), supporting a mid-teens 3-yr EPS CAGR. With Lowe's still trading at an 11%/19% discount to the S&P 500/Home Depot, we view the valuation as attractive and upgrade the stock to O/W with a $240 PT."
Shares of Lowe's closed at $199.72 yesterday.
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