Lowe’s Companies Inc’s stock, identified by the ticker symbol LOW on the New York Stock Exchange, experienced a decline in early trading on Tuesday.
Experiencing pressure on the consumer’s share of wallet for goods, a resumption in wage growth indicates a relief from this pressure, according to JPMorgan analyst Christopher Horvers.
Analyst’s Upgrade: Horvers upgraded Lowe’s Companies from Neutral to Overweight and raised the price target from $210 to $265.
Reasoning Behind the Upgrade: Horvers noted that the home improvement category is approaching less than 5% from the pre-COVID wallet share, suggesting favorable growth prospects in the upgrade note.
Consult other analysts’ stock ratings for comparison.
“Moreover, LOW’s largest category appliances (13.9% of sales) is further along in the deflation process,” the analyst wrote. A “better spring after two poor weather periods could lead to a faster than expected comp recovery” in Lowe’s outdoor garden center, he added.
The Federal Reserve’s expected rate cuts could also spur growth. “While we continue to think that the rebound will be partly muted by the locked-in mortgage rate dynamic, the sheer potential magnitude of such a recovery suggests a strong acceleration in trends against arguably low consensus expectations,” Horvers further stated.
Lowe’s has been added to JPMorgan’s Analyst Focus List “as a Value stock idea,” he said.
LOW Price Action: At the time of publication on Tuesday, shares of Lowe’s Companies declined by 2.3% to $224.57.
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