Truist Raises Lowe’s (LOW) Target as Shoppers Stay Focused on Value

Group 1: Company Overview - Lowe's Companies, Inc. (NYSE:LOW) is one of the largest home improvement retailers in the US, offering products related to building, maintenance, repair, remodeling, and decorating, along with installation and related services [5] Group 2: Financial Performance - In its third-quarter earnings release, Lowe's reported a 0.4% year-over-year increase in comparable sales, while total sales rose by 3%. However, net income declined by 5% [4] - The company expects to incur $1.4 billion in interest expenses for the year, an increase from a previous forecast of $1.3 billion. In Q3, Lowe's reported $2.48 billion in operating income, with $352 million allocated to interest payments, indicating that approximately 14% of net operating income is used to service debt [4] Group 3: Strategic Initiatives - Lowe's is focusing on attracting professional builders and contractors, who typically spend more and return frequently. Recent acquisitions, including Artisan Design Group in June and Foundation Building Materials in October, are aimed at enhancing its appeal to these professional customers [3] - Expanding the professional offering is central to driving more consistent sales and profit growth, although the broader business has been slow to move [4] Group 4: Market Outlook - Truist analyst Scot Ciccarelli raised Lowe's price target to $269 from $256, maintaining a Buy rating, citing that shoppers are remaining selective and focused on value. The firm noted that over $35 trillion in home equity remains available for reinvestment, which could benefit the home improvement sector as long as home supply remains tight and prices stable or rising [2]