A recent Goldman Sachs report has upgraded its rating for Lowe’s (NYSE:LOW), the U.S.’s second largest home-improvement retailer after Home Depot (NYSE:HD), from ‘Neutral’ to ‘Buy’ with a higher price target of $28, up from previous $26. The upgrade was in response to management’s continued efforts to reinvent its strategies from a new national re-branding campaign, to store upgrades and roll out of powerful online tools like ‘MyLowes’ to engage customers.
Lowe’s Self-Improvement Underway
The company finished its third quarter with better than expected sales
, even though out-performed by Home Depot. In the third quarter, sales grew 2.3%, higher than expected 2%. It also raised its fiscal 2011 guidance to 2-3% from the previous 2%. The company’s management has been proactive with recent organizational restructuring and efficiency initiatives. It recently launched a new branding campaign
and online tool “MyLowes”
to boost web-sales. If these efforts translate into improved sales would definitely provide upside to Lowe’s stock value. In the next quarter, Lowe’s is targeting 8% sales growth, particularly through online sales. It may still suffer some margin compression.