ISI: Lowe's Sees Traffic Increase, 13% Buyback on the Horizon

According to a research report published today by ISI, Lowe's LOW traffic rose 3.8%, and there is large potential for leverage increases/sizeable buybacks. ISI further commented in the report, “LOW has plenty of overhead cover to revamp the merchandising, reposition the asset base and narrow the comp gaps in 2012. We increasingly favor the capital return profile at LOW, yet we think the operating improvements will likely not materialize until 2H. On a shareholder return basis, this would be a top pick; on an operating basis, we see better opportunity elsewhere.” ISI maintains its Hold rating and $28 PT on Lowe's, which closed yesterday at $27.34.