Lowe's (LOW) over delivered on a soft Q3 bar but has limited top line visibility despite margin progress and Pro momentum, RBC Capital Markets said in a Wednesday note.

RBC said it lowered its Q4 comparable sales estimate to roughly flat from +1% earlier and trimmed Q4 adjusted EPS estimate to $1.95 to reflect a weather-related headwind and dilution from the Artisan Design Group and FBM acquisitions.

The firm said Lowe's has implemented wide-ranging operational changes under CEO Marvin Ellison since 2018 by focusing on upgraded technology, refreshed merchandise, and a more efficient supply chain to better serve customers. However, the company's path to earnings growth remains dependent on macro conditions and the magnitude of rate cuts, according to the note.

RBC has a sector perform rating on Lowe's and lowered its price target to $252 from $260.

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