JP Morgan Reiterates Neutral, $26 PT on Lowe's

JP Morgan maintains its Neutral rating and $26 target price on Lowe's Companies, Inc. LOW as sales accelerated through a wet and cool spring but macro improvement is necessary for stock to move higher. JPM says, “the company is taking a more aggressive stance on controlling their own destiny mainly based on an expansive line review process that continues through mid 2013 and a transition to EDLP/EDLC in order to drive 300-500 bps of improved conversion, a 15% improvement in sales per foot, and average 3.5% comps through 2015. Combined with $18B in buybacks over the next four years, 80-90 bps of gross margin expansion, and ~180 bps of SG&A leverage, LOW's continues to target a 10% EBIT margin by 2015 (equating to $3.66 in EPS).” LOW closed at $26 per share on Tuesday.