LOW Q2 Sales Guidance Seems Conservative

Analysts at Jefferies & Co reiterate their "buy" rating on Lowe's Cos LOW, while raising their estimates for the company. The target price for LOWE is set to $32. LOW has posted better-than-expected Q1 results. According to Jefferies & Co, it seems that Lowe's sales guidance could “prove conservative given the easy comparisons when unfavorable weather persisted last year.” The analysts mention, “Our positive outlook on housing turnover is supported by improving credit availability, low mortgage rates, rising affordability, some signs of housing price stabilization, a bottoming in labor markets and a bottoming in residential investment spending as a percent of GDP… We need to see confidence remain strong in three key areas as we work through the negative news coming out of Europe. This includes consumer, CEO and bank confidence. If one or more of these falters then spending, payroll and bank lending could jeopardize our housing and broader economic recovery thesis.” LOW has repurchased around 18.6 million shares at an average price of $24.18 during Q1. Jefferies & Co has raised its EPS estimates for 2011 and 2012 from $1.42 to $1.47 and from $1.66 to $1.73, respectively. More Analyst Ratings here