Lowe's (LOW) AI Stock Analysis

• Market Cap: $158.26B
• Dividend Yield: 1.94%
• Average Volume (3M): 2.64M
• Price to Earnings (P/E): 23.4
• Beta (1Y): 0.72
• 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: 2,326,914
• 30 Day Avg. Volume: 2,637,027
• 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: 1.27
• Enterprise Value/Revenue: 2.39
• Enterprise Value/Gross Profit: 7.60
• Enterprise Value/Ebitda: 16.13
• 1Y Price Target: $297.31
• Price Target Upside: 6.04% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): 12.9
• Revenue Forecast (FY): $93.31B

• Rating: 69 Neutral
• Price Target: $307.00 ▲(9.50% Upside)
• Action: Reiterated Date: 12/09/25
• Date: Action: Reiterated 12/09/25

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

Profitability & Margins

Lowe's sustained gross (~32%) and net (~8%) margins reflect durable operating scale, sourcing and category mix advantages. These margins underpin consistent cash generation and provide bandwidth to fund investments in digital, Pro services, and installations, supporting long-term competitiveness.

Digital & AI-driven Sales

Double-digit online growth and adoption of AI tools indicate a structural shift to higher-conversion digital channels. Improved traffic, conversion and productivity reduce reliance on store footfall, raise lifetime customer value, and strengthen omnichannel resilience for both DIY and Pro customers over the medium term.

Strategic FBM Acquisition

The Foundation Building Materials acquisition diversifies Lowe's into commercial/pro channels and adds meaningful sales scale. FBM expands product breadth and contractor relationships, creating cross-sell and margin improvement opportunities that can sustainably bolster revenue mix and long-term growth.

Negative Factors

High Leverage

Negative shareholders' equity and elevated leverage materially increase financial risk and constrain strategic flexibility. Higher interest exposure and reduced borrowing capacity can limit capital for reinvestment, make integration of acquisitions costlier, and heighten vulnerability if cash flows deteriorate.

Weak Free Cash Flow Growth

Declining free cash flow growth reduces internal funding for capex, deleveraging, and shareholder returns. With recent large acquisition financing needs, weaker FCF expansion tightens liquidity cushions and could force higher reliance on external financing or slower investment in digital and Pro initiatives.

Inconsistent Revenue Growth

Intermittent or declining top-line trends, coupled with macro uncertainty and weather headwinds, signal vulnerability in discretionary demand. Without sustained comp growth or successful Pro/commercial expansion, Lowe's may face persistent revenue pressure that limits margin and cash-flow improvement.

Lowe's Business Overview & Revenue Model

Company Description

Lowe's Companies, Inc., together with its subsidiaries, operates as a home improvement retailer in the United States and internationally. The company offers a line of products for construction, maintenance, repair, remodeling, and decorating. It provides home improvement products, such as appliances, seasonal and outdoor living, lawn and garden, lumber, kitchens and bath, tools, paint, millwork, hardware, flooring, rough plumbing, building materials, decor, lighting, and electrical. It also offers installation services through independent contractors in various product categories; extended protection plans; and in-warranty and out-of-warranty repair services. The company sells its national brand-name merchandise and private brand products to homeowners, renters, and professional customers. As of January 28, 2022, it operated 1,971 home improvement and hardware stores. The company also sells its products through websites comprising Lowes.com and Lowesforpros.com; and through mobile applications. Lowe's Companies, Inc. was founded in 1921 and is based in Mooresville, North Carolina.

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 is characterized by strong profitability but is offset by high leverage and declining revenue growth. The income statement reflects efficient operations, while the balance sheet indicates potential financial risk due to negative equity. Cash flow management is adequate, though declining free cash flow growth poses a challenge. Overall, the company needs to address leverage and improve growth to enhance 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	Jan 2025	Jan 2024	Jan 2023	Jan 2022	Jan 2021
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	12.48B	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: 280.36
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 280.36 is above the 20-day moving average (MA) of 277.40, above the 50-day MA of 262.71, and above the 200-day MA of 242.34, indicating a bullish trend. The MACD of 5.35 indicates Positive momentum. The RSI at 57.70 is Neutral, neither overbought nor oversold. The STOCH value of 33.10 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	$25.54B	23.52	56.92%	1.37%	5.10%	7.59%
LOW	69 Neutral	$158.26B	23.39	―	1.94%	0.64%	0.58%
TSCO	67 Neutral	$27.76B	25.50	45.18%	1.80%	4.26%	0.73%
HD	66 Neutral	$381.80B	26.15	162.91%	2.67%	7.50%	-0.38%
BBY	62 Neutral	$14.02B	22.09	22.49%	5.46%	-0.95%	-48.28%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
FND	59 Neutral	$7.54B	33.06	9.11%	―	6.04%	10.26%