Lowe's Inks Deal to Sell Canadian Retail Business

Yesterday, UBS cut its price target on LOW

Deputy Editor
Nov 4, 2022 at 9:03 AM
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Lowe's Companies Inc (NYSE:LOW) is trending ahead of the open, following reports that the company is selling its Canadian retail business. According to a press release, the home improvement retailer inked an agreement with private equity firm Sycamore Partners towards the end of yesterday's session, with the receipt coming out to $400 million in cash and "performance-based deferred consideration."

Shares of Lowe's stock are relatively muted ahead of the open, sporting a 0.7% gain to trade at $181. Despite a recent pullback from its August rally above the $220 mark, LOW is managing to hold above its July annual lows at the $170 level. Coming into today, the stock sports a 30.4% year-to-date deficit.

Before the news broke, UBS cut its price target on the equity to $235 from $250, which is slightly below Lowe's stock's 12-month consensus target price of $240.53 -- still a 33.8% premium to Thursday's close. Meanwhile, the majority of analysts are bullish, though nine of the 24 in coverage still rate the shares a "hold" or "strong sell."

On the other hand, options traders are more bearish than usual. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), LOW sports 10- and 50-day put/call volume ratios of 3.73 and 1.71, respectively. Both of these sit in higher than all 100% of readings from the past year, and indicate puts outpace calls on an overall basis and are being picked up at their fastest annual clip.


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