Lowe's (LOW): Demand Strong But Valuation Rich - Raymond James

Raymond James analyst, Budd Bugatch, reiterated his Market Perform rating on Lowe's (NYSE: LOW) following Lowe’s F1Q16 earnings release and conference call. The company delivered total sales and EPS ahead of our and consensus estimates and remarked that the environment is, and should remain, supportive of the DIY market. Despite the company’s two-year stacked comp remaining flat quarter-over-quarter at 12.5% and favorable macro backdrop valuation keeps him on the sidelines.

Lowe's reported F1Q16 results Wednesday before the market open. Adjusted EPS, excluding a $160 million pre-tax gain ($0.11 per share, after-tax) on a foreign currency hedge, were $0.87, above the $0.85 consensus. Total sales increased 7.8% y/y to $15.23 billion, also above the $14.87 billion consensus. Consolidated comparable store sales increased +7.3% and comparable stores sales for the U.S. business increased +7.5%.

No change to Market Perform rating.

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 $78.60 yesterday.

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