Deutsche Bank cuts price target, estimates for Lowe's Cos., Home Depot

BOSTON, Jul 11, 2008 (Thomson Financial via COMTEX) -- LOW | Quote | Chart | News | PowerRating -- Deutsche Bank on Friday lowered its price target and estimates on Lowe's Cos. Inc. and Home Depot Inc., saying the "road to recovery" for home improvement retailers appears to be longer.

The firm cut its price target on Lowe's Cos. to $23 from $26. Deutsche Bank said the new price target is based on a long-term growth rate of 14% and the long-term hardline average price/earnings to growth (PEG) of 110%, "appropriate given Lowe's Cos. square footage growth potential balanced with sector-related risks, primarily housing."

For Home Depot, the firm lowered its price target to $22 from $25 and said its new price target is based on a long-term growth rate of 12% and the long-term hardline average PEG of 110%, "an appropriate multiple given the balance of Home Depot's re-investment opportunities tempered with limited U.S. growth opportunities."

For fiscal 2009, Deutsche Bank cut its Lowe's Cos. earnings estimate to $1.57 from $1.62 a share, and lowered its Home Depot forecast to to $1.71 from $1.86 a share. Analysts polled by Thomson Reuters, on average, expect 2009 profit of $1.51 a share for Lowe's Cos. and 2009 profit of $1.72 a share for Home Depot.

Shares of Lowe's Cos. closed Thursday at $19.42, while shares of Home Depot closed at $21.87. Casey Logan cl/tk1

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