Morgan Stanley Maintains Underweight on Lowe's

Morgan Stanley reiterates its Underweight rating on Lowe's LOW following solid results on Q4 and in-line 2012 outlook. Morgan Stanley says, "Lowe's reported 4Q11 results that were slightly ahead of our expectations as well as consensus. However, most of the major trends were likely in line with investor expectations after HD reported a greater than previously expected acceleration in comps last week. LOW's better than expected top line was likely due to weather benefits (as HD noted it added 200-250bps to its comp), but adjusted gross margins were slightly below expectations. Strong SG&A expense control and lower than expected tax-rate drove EPS above expectations." LOW closed at $27.16 a share yesterday.