The Mooresville, N.C.-based Lowe's is reviewing its product lines and stores, but that hasn't created enough positive change, Laura Champine said.
She added that the company's recent shuffling of its senior management positions "appears counterproductive," with senior merchandising and supply chain executives moved over to customer relations jobs. Its top merchandising job also remains vacant, she said.
She also criticized investments in online shopping, which she said makes up just 1 percent of Lowe's sales. She doesn't expect online shopping to be a significant sales driver in the home improvement industry overall.
Lowe's declined comment on the report.
"Lowe's long-term financial targets appear aggressive in our view, as the company appears on track to hit the low end of its previous fiscal 2012 outlook," Champine wrote in a note to investors.
The company said in early December that it expects its sales to reach $58.1 billion in 2015, as it opens between 10 and 15 new stores each year in North America. Champine said she expects sales to rise a smaller amount, to $56 billion by 2015.
However, she lifted her price target by $2 to $27. That's still below Lowe's stock price, which fell 88 cents, or 2.5 percent, to $34.70 in afternoon trading Monday. During 2012, Lowe's shares gained about 40 percent.