Lowe's (LOW) AI Stock Analysis

• Market Cap: $156.28B
• Dividend Yield: 1.94%
• Average Volume (3M): 2.64M
• Price to Earnings (P/E): 22.7
• 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): 1.98
• Shares Outstanding: 560,951,500
• 10 Day Avg. Volume: 2,326,914
• 30 Day Avg. Volume: 2,637,027
• PEG Ratio: -0.63
• Price to Book (P/B): -12.82
• Price to Sales (P/S): 6.40
• P/FCF Ratio: 1.48K
• Enterprise Value/Market Cap: 1.28
• Enterprise Value/Revenue: 2.38
• Enterprise Value/Gross Profit: 7.57
• Enterprise Value/Ebitda: 16.05
• 1Y Price Target: $295.79
• Price Target Upside: 6.17% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: $300.00 ▲(7.69% 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

Margin and Profitability

Sustained gross margins near 32% and ~8% net margin indicate durable merchandising economics and operating efficiency. Healthy margins support reinvestment in stores, services and digital tools, underpinning cash generation and resilience through varying demand cycles.

Total Home strategy and Pro growth

Execution of the Total Home plan, with stronger Pro offerings and double-digit Home Services growth, diversifies revenue toward higher-frequency, higher-ticket professional customers and recurring service revenue. This reduces cyclicality and builds longer-term customer relationships and share gains.

FBM acquisition expands commercial sales

Adding FBM meaningfully expands Lowe's commercial and contractor-facing assortment and scale in building materials. The acquisition accelerates entry into complementary channels, increases cross-sell opportunities with Pro customers, and strengthens durable revenue diversification.

Negative Factors

High leverage and negative equity

Negative shareholders' equity and elevated leverage signal structural balance-sheet risk. Reliance on debt reduces financial flexibility, raises sensitivity to interest rate moves and limits capacity for opportunistic investment or rapid deleveraging during downturns, pressuring long-term stability.

Declining free cash flow growth

A downtrend in free cash flow growth constrains the company’s ability to pay down debt, fund capex, or increase shareholder returns over time. Even with a healthy FCF-to-net-income ratio, declining FCF momentum weakens long-term funding optionality for strategic priorities.

Inconsistent revenue growth and macro sensitivity

Intermittent revenue trends and a recent TTM decline highlight exposure to housing cycles and discretionary spending. Macro uncertainty and weather-driven disruptions can compress comps and limit predictable top-line growth, complicating long-run planning and margin sustainability.

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 2026	Jan 2025	Jan 2024	Jan 2023	Jan 2022
Income Statement
Total Revenue	84.25B	86.29B	83.67B	86.38B	97.06B	96.25B
Gross Profit	26.48B	28.89B	26.15B	27.13B	30.49B	30.39B
EBITDA	12.48B	10.69B	12.59B	13.57B	12.69B	14.47B
Net Income	6.78B	6.65B	6.96B	7.73B	6.44B	8.44B
Balance Sheet
Total Assets	53.45B	54.14B	44.57B	43.36B	45.27B	46.33B
Cash, Cash Equivalents and Short-Term Investments	1.03B	1.35B	2.13B	1.23B	1.73B	1.40B
Total Debt	44.70B	7.19B	39.68B	40.15B	37.99B	29.38B
Total Liabilities	63.84B	64.06B	58.80B	58.41B	59.53B	51.15B
Stockholders Equity	-10.38B	-9.92B	-14.23B	-15.05B	-14.25B	-4.82B
Cash Flow
Free Cash Flow	7.05B	7.65B	7.70B	6.18B	6.76B	8.26B
Operating Cash Flow	9.21B	9.86B	9.63B	8.14B	8.59B	10.11B
Investing Cash Flow	-12.11B	-12.26B	-1.74B	-1.90B	-1.31B	-1.65B
Financing Cash Flow	247.00M	1.62B	-7.05B	-6.67B	-7.05B	-12.02B

Lowe's Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 278.59
• 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 278.59 is above the 20-day moving average (MA) of 277.32, above the 50-day MA of 264.04, and above the 200-day MA of 242.91, indicating a bullish trend. The MACD of 4.13 indicates Positive momentum. The RSI at 54.65 is Neutral, neither overbought nor oversold. The STOCH value of 23.89 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	$156.28B	22.74	―	1.94%	0.64%	0.58%
TSCO	67 Neutral	$28.04B	26.17	45.18%	1.80%	4.26%	0.73%
BBY	62 Neutral	$13.14B	20.70	22.49%	5.46%	-0.95%	-48.28%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
HD	61 Neutral	$382.75B	26.49	162.91%	2.67%	7.50%	-0.38%
FND	59 Neutral	$7.51B	36.17	9.11%	―	6.04%	10.26%