Bernstein Slashes Lowe's Price Target Amid Delayed Home Improvement Recovery

Bernstein SocGen Group reduced its price target for Lowe's Companies () to $254 from $261 while maintaining an Outperform rating. The stock currently trades at $200.80, near its 52-week low of $199.34, down 24% over the past year.

The firm attributed the delayed recovery in home improvement demand to uncertain timing and lower affordability due to rising mortgage rates. Macroeconomists now project rate hikes rather than cuts, which will not improve housing turnover or the affordability of home improvement projects.

Lowe's trades at approximately a 4.5 times discount to Home Depot () compared with the long-term average of around 3 times. Bernstein believes Lowe's is better positioned to participate on the upside when the home improvement market rebounds due to its greater exposure to big-ticket discretionary projects.