Lowe's (LOW) AI Stock Analysis

• Market Cap: $138.72B
• Dividend Yield: 1.9%
• Average Volume (3M): 3.39M
• Price to Earnings (P/E): 20.5
• Beta (1Y): 0.78
• Revenue Growth: 0.64%
• EPS Growth: 0.58%
• Country: US
• Employees: 161,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Home Improvement
• EPS (TTM): 3.06
• Shares Outstanding: 560,951,500
• 10 Day Avg. Volume: 3,443,877
• 30 Day Avg. Volume: 3,394,110
• PEG Ratio: -2.83
• Price to Book (P/B): -10.36
• Price to Sales (P/S): 1.76
• P/FCF Ratio: 19.15
• Enterprise Value/Market Cap: 1.28
• Enterprise Value/Revenue: 2.10
• Enterprise Value/Gross Profit: 6.69
• Enterprise Value/Ebitda: 14.30
• 1Y Price Target: $278.86
• Price Target Upside: 12.77% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 23
• EPS Forecast (FY): 12.26
• Revenue Forecast (FY): $85.96B

• Rating: 69 Neutral
• Price Target: $268.00 ▲(8.37% Upside)

Lowe's overall stock score is driven by strong earnings call performance and strategic initiatives, including the acquisition of Foundation Building Materials. However, financial performance is hindered by high leverage and declining revenue growth. Technical analysis suggests positive momentum, but potential overbought conditions. Valuation is fair, with a reasonable P/E ratio and moderate dividend yield.

Positive Factors

Acquisition of Foundation Building Materials

The acquisition of FBM enhances Lowe's offerings to professional customers, aligning with its Total Home strategy and positioning the company for growth in a $250 billion market.

Online Sales Growth

Strong online sales growth indicates successful digital transformation, enhancing customer reach and supporting long-term revenue growth.

Total Home Strategy Success

The Total Home strategy's success in enhancing Pro offerings and Home Services supports Lowe's competitive positioning and market expansion.

Negative Factors

High Leverage

High leverage and negative equity pose financial risks, limiting flexibility and potentially impacting long-term financial stability.

Declining Revenue Growth

Inconsistent revenue growth can hinder long-term business expansion and market share gains, challenging Lowe's competitive edge.

Debt and Financing Costs

Significant debt and financing costs from acquisitions increase financial burden, impacting cash flow and profitability.

Lowe's Business Overview & Revenue Model

Company Description

Lowe's Companies, Inc. is a leading home improvement retailer in the United States, specializing in selling a wide range of products for home improvement, repair, and maintenance. The company operates a chain of retail stores that offer a variety of merchandise, including building materials, home appliances, lawn and garden supplies, and home décor items. With a strong focus on customer service, Lowe's serves both DIY (do-it-yourself) consumers and professional contractors through its extensive network of locations and online platforms.

How the Company Makes Money

Lowe's generates revenue primarily through the sale of home improvement products and services. The company's revenue model is based on retail sales from its brick-and-mortar stores as well as its e-commerce platform. Key revenue streams include sales of building materials, appliances, tools, and seasonal items like garden products. Additionally, Lowe's offers installation services for various products, which also contributes to its earnings. The company benefits from strategic partnerships with suppliers and manufacturers, ensuring a diverse product offering. Loyalty programs and credit services further enhance customer retention and drive sales, contributing to Lowe's overall profitability.

Lowe's Financial Statement Overview

Summary

Lowe's financial performance shows strong profitability with efficient operations, as indicated by healthy gross and net profit margins. However, the high leverage and negative equity on the balance sheet pose significant financial risks. Additionally, declining revenue growth and free cash flow are concerns that need addressing to improve financial stability.

Income Statement

Lowe's demonstrates strong profitability with a consistent gross profit margin around 32% and a net profit margin of approximately 8%. However, revenue growth has been inconsistent, with a slight decline in the most recent TTM period. The EBIT and EBITDA margins indicate efficient operations, though they have slightly decreased over time.

Balance Sheet

The balance sheet shows a high level of leverage with a negative stockholders' equity, resulting in a negative debt-to-equity ratio. This indicates potential financial risk. Return on equity is also negative, reflecting challenges in generating returns for shareholders. The equity ratio is concerning, suggesting a reliance on debt financing.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth, though the company maintains a healthy free cash flow to net income ratio. Operating cash flow coverage is moderate, indicating some ability to cover net income with operating cash flow. However, the negative growth in free cash flow is a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	84.25B	83.67B	86.38B	97.06B	96.25B	89.60B
Gross Profit	26.48B	26.15B	27.13B	30.49B	30.39B	28.17B
EBITDA	12.38B	12.59B	13.57B	12.69B	14.47B	10.68B
Net Income	6.78B	6.96B	7.73B	6.44B	8.44B	5.83B
Balance Sheet
Total Assets	53.45B	44.57B	43.36B	45.27B	46.33B	48.29B
Cash, Cash Equivalents and Short-Term Investments	1.03B	2.13B	1.23B	1.73B	1.40B	5.20B
Total Debt	44.70B	39.68B	40.15B	37.99B	29.38B	26.21B
Total Liabilities	63.84B	58.80B	58.41B	59.53B	51.15B	46.85B
Stockholders Equity	-10.38B	-14.23B	-15.05B	-14.25B	-4.82B	1.44B
Cash Flow
Free Cash Flow	7.05B	7.70B	6.18B	6.76B	8.26B	9.26B
Operating Cash Flow	9.21B	9.63B	8.14B	8.59B	10.11B	11.05B
Investing Cash Flow	-12.11B	-1.74B	-1.90B	-1.31B	-1.65B	-1.89B
Financing Cash Flow	247.00M	-7.05B	-6.67B	-7.05B	-12.02B	-5.19B

Lowe's Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 247.29
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LOW, the sentiment is Positive. The current price of 247.29 is above the 20-day moving average (MA) of 238.74, above the 50-day MA of 238.50, and above the 200-day MA of 233.89, indicating a bullish trend. The MACD of 2.81 indicates Negative momentum. The RSI at 58.11 is Neutral, neither overbought nor oversold. The STOCH value of 62.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LOW.

Lowe's Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WSM	75 Outperform	$22.39B	20.62	56.92%	1.36%	5.10%	7.59%
TSCO	73 Outperform	$27.46B	25.08	45.46%	1.77%	4.26%	0.73%
LOW	69 Neutral	$138.72B	20.50	―	1.90%	0.64%	0.58%
HD	66 Neutral	$358.04B	24.52	162.91%	2.56%	7.50%	-0.38%
FND	63 Neutral	$6.78B	30.58	9.69%	―	6.04%	10.26%
BBY	62 Neutral	$15.39B	24.25	22.49%	5.16%	-0.95%	-48.28%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Lowe's Corporate Events

Lowe’s Completes Acquisition of Foundation Building Materials

On October 9, 2025, Lowe’s Companies, Inc. completed its acquisition of Foundation Building Materials, Inc. for $8.8 billion in cash. This acquisition is expected to enhance Lowe’s offerings to professional customers by expanding its product range and improving fulfillment, digital tools, and trade credit platforms. The acquisition aligns with Lowe’s Total Home strategy, aiming to serve large professional customers in a $250 billion market, and positions the company for growth in key geographies and the anticipated recovery in the housing market.

Lowe’s Issues $5 Billion in Unsecured Notes

On September 30, 2025, Lowe’s Companies, Inc. issued $5.0 billion in unsecured notes with varying maturity dates and interest rates, resulting in net proceeds of approximately $4.97 billion. This strategic move aims to strengthen the company’s financial position, although the notes do not have an established trading market and are not intended for listing on any securities exchange. The issuance is not contingent on the completion of Lowe’s acquisition of Foundation Building Materials, Inc., but a special mandatory redemption will occur if the acquisition is not completed by August 19, 2027.

Lowe’s Secures Credit Agreements for Major Acquisition

On September 16, 2025, Lowe’s Companies, Inc. entered into several credit agreements to finance its acquisition of ASP Flag Parent Holdings, Inc. for approximately $8.8 billion. These agreements include a $2 billion 5-Year Revolving Credit Agreement and a $2 billion Term Loan Credit Agreement, replacing previous commitments and supporting the company’s commercial paper program. Additionally, a $1 billion 364-Day Revolving Credit Agreement was established for general corporate purposes. The company plans to replace remaining bridge facility commitments through capital markets transactions before the acquisition’s closing.