Lowes rises amid independent director appointments, activist push - InvestingChannel

Lowes rises amid independent director appointments, activist push

Shares of Lowe’s (LOW) are moving higher after the company announced the appointment of two independent directors to its board and plans to nominate a third following talks with activist investor D.E. Shaw. DIRECTOR APPOINTMENTS: Lowe’s announced on Friday that it has appointed David Batchelder, co-founder of Relational Investors, and Lisa Wardell, CEO of Adtalem Global Education (ATGE), to its board of directors, effective March 22. The company will nominate Batchelder, Wardell and new nominee Brian Rogers, chairman of T. Rowe Price Group (TROW) and its former chief investment officer, for election at its annual meeting of shareholders. Batchelder will serve on the board’s compensation committee and nominating and governance committee, Wardell will serve on the audit and public policy committees and Rogers’ committee appointments have yet to be determined. Commenting on the board nominees, Robert Niblock, Lowe’s chairman, president and chief executive officer, said that “They join Lowe’s at an exciting time as we continue to drive our omni-channel strategy forward and build deeper relationships with pro customers to fulfill our purpose of helping people love where they live. The addition of these directors complements our board of directors’ skills and experiences, and we are confident they will provide valuable perspectives as we continue to execute our strategy, drive profitability and enhance value for all Lowe’s shareholders. We look forward to their contributions and are excited they chose Lowe’s.” Meanwhile, D.E. Shaw portfolio manager Quintin Koffey commented that “We appreciate Lowe’s collaborative approach and are pleased to have worked together to enhance the company’s board of directors. Lowe’s is an excellent company with tremendous value creation opportunities in front of it, and we believe the new directors will be significant assets to the board. We believe the refreshed board and the management team are committed to achieving outstanding performance and maximizing shareholder value.” D.E. SHAW ACTIVIST STAKE: Activist D.E. Shaw, which has a stake worth about $1B in Lowe’s , believes the shares could triple if the company can better compete with Home Depot (HD), Bloomberg reported Friday. D.E. Shaw established an active stake in Lowe’s with plans to use its holding to agitate for changes at the home retailer, Bloomberg reported on January 12. ANALYST REACTION: On Friday, UBS analyst Michael Lasser said after meeting with Lowe’s management, he believes the company can do better and that if an outsider were to agitate for some action it would lead to better execution. The company said its long-term targets remain on the table and the analyst believes the shares will move higher as the year progresses. Lasser reiterated his Buy rating and raised his price target to $120 from $112 on Lowe’s shares. Meanwhile, BTIG analyst Alan Rifkin raised his price target on Lowe’s to $115 and kept his Buy rating. Rifkin contended that execution at Lowe’s is improving, with staffing issues now in the past, while the outlook for home improvement remains robust amid rising disposable income and strong housing fundamentals. The analyst cites a tight housing supply at 3.6 months, supporting the housing renovation activity, adding that the benefits from hurricane recovery and favorable comps trends are also positive for the stock. PRICE ACTION: Lowe’s was up 2.1%, or $2.12, to $103.48 in morning trading.