Deutsche Bank Maintains Lowe's Rating And PT

Lowe's Companies, Inc. LOW hosted an analyst day, which Deutsche Bank believes presented two key takeaways. “First, we believe LOW is targeting a lower sales, but higher margin, outlook relative to previous long-term guidance, with gross margin opportunities on several,” Deutsche Bank writes. “Secondly, LOW significantly ramped its buyback projections, moving from a run-rate of $3.6b by FY14 to an average of $3.6b per year through FY15. We maintain our Buy rating on valuation and suppressed near-term earnings relative to its long-term potential.” Deutsche Bank maintains its Buy rating and $26 price target, adding, “Our $26 price target is based on 15x our FY11 EPS forecast. The 15x multiple is in line with the 5-year group average. Downside risks for LOW are primarily housing related. Specifically, housing markets may fail to improve, even as mortgage rates decline.” Lowe's currently trades at $22.70.