Bernstein analysts upgraded Lowe's Cos. (NYSE:LOW) to Outperform from Market Perform in a note on Tuesday, raising the price target for the stock to $282 from $252 per share.
The analysts stated in a note that the firm now sees a confluence of positive and mutually reinforcing trends for the company that they expect to continue.
"We believe LOW will continue to deliver modest op margin expansion over the next 24 months, driven by the continued modest gross margin expansion of 5-10bps / year combined with stable to modestly improving OpEx % of sales," wrote the analysts.
"We expect LOW’s PRO growth to continue to outpace HD’s as LOW continues to close the Pro 'primary source for' preference vs. HD, driving LOW gain share from HD in the store-based, immediate-need occasion, which will bolster LOW's OpEX leverage," they added.
Bernstein is comfortable with the home improvement market outlook in the near term and sees a return to low-single-digit growth into 2024-25 "as the housing market stabilizes."
Furthermore, the firm "remains unequivocally bullish on the long-term drivers" of home improvement spending."