Lowe’s downgraded based on altered growth strategy

San Francisco A Raymond James analyst downgraded the shares of Lowe's on Friday, saying it will be at a disadvantage to Home Depot as it switches its growth strategy.

Analyst Budd Bugatch downgraded Lowe's to "Outperform" from "Strong Buy."

Bugatch said Lowe's Cos. is moving from a higher growth strategy "where it expends significant capital resources to a more mature strategy with more measured unit growth." He said this makes it more vulnerable to Home Depot over the next few quarters because of its geographical concentration and tougher prior-year comparisons.

Lowe's confirmed at a recent conference of analysts that it would expand its overall square footage growth by 2% to 2.5% over the next five years, Bugatch said, an announcement that would likely lead some value-oriented investors to pull back.