Goldman Sachs Anxious For Lowe's Analyst Day

Goldman Sachs has published a research report on Lowe's Companies LOW in anticipation of the company's analyst day. In the report, Goldman Sachs writes "We expect LOW's upcoming meeting to reinforce our investment thesis: We expect a sober view on the macro backdrop, with little enthusiasm for a turn. Sobriety on this front would be a welcome change from the enthusiasm that emanated from prior events, which “set the bar” quite high, and led to optimistic planning for cost and capital allocation. This should translate to guidance that, at best, brackets the Street at the high end. Moreover, we hope the company draws attention to a very difficult 1Q sales compare. For long run guidance, we expect LOW to endorse prior targets – sales per foot of ~ $305, EBIT margin of 9.2%-9.3%. We expect further detail on margin drivers, most notably price optimization, that should keep EPS growth afloat near-term despite a choppy top-line. This should give the firm more operational detail to share vs. a year ago, when we heard little incisive new color on the business. We expect reaffirmation of more disciplined capital allocation, with lower cap-ex. Note that the company acted early by raising its leverage target to 1.8X from 1.5X, and issuing $1 billion in bonds." Goldman Sachs maintains its Buy rating and $26 price target. Lowe's Companies closed Friday at $22.24.