was upgraded to outperform from neutral at Wedbush based on growth signals resulting from Chief Executive Marvin Ellison’s growth plan for the home improvement retailer. Wedbush analysts led by Seth Basham also raised Lowe’s price target to $135 from $115. “Lowe’s focus on boosting Pro sales through increased service levels, pricing and merchandising is beginning to pay off, with enormous runway ahead,” the note said. “Labor-efficiency drivers are starting to build, such that Lowe’s might be able to hold operating expenses flat for the next three years to drive +250 basis points of margin improvement in a bull case scenario.” Wedbush is still wary of Lowe’s goal to reach $370 per square foot and operating margins of 12%, but analysts now see upside through 2022. In addition, analysts say Lowe’s is closing the same-store sales gap with its biggest competitor Home Depot Inc.
Lowe’s stock has rallied 23% for the year to date while the S&P 500 index
is up 19.7% for the period.
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