Lowe's Companies (LOW)
NYSE:LOW
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Lowe's
(NYSE:LOW)
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Rating:56Neutral
Price Target:
$225.00
▼(-10.61% Downside)
Action:Reiterated
Date:05/20/26
The score is supported by strong cash generation and solid operating profitability, plus a cautiously constructive earnings outlook with reaffirmed FY2026 guidance. It is held back primarily by balance-sheet weakness (negative equity) and bearish technicals with the stock trading below key moving averages; valuation is also somewhat stretched at a ~37 P/E despite a ~2.2% dividend yield.
Positive Factors
Strong cash generation
Consistent, multi-billion free cash flow provides durable funding for dividends, capex, acquisitions and debt paydown. Over 2–6 months this supports the company’s deleveraging target and capital allocation flexibility, cushioning cyclical retail swings and enabling strategic investments.
Negative Factors
Negative shareholders' equity
Persistently negative equity signals accumulated deficits or large buybacks and limits financial flexibility. It makes leverage metrics less informative, increases refinancing and covenant risk in stress, and constrains capacity to fund large strategic initiatives without raising costly debt or equity.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Consistent, multi-billion free cash flow provides durable funding for dividends, capex, acquisitions and debt paydown. Over 2–6 months this supports the company’s deleveraging target and capital allocation flexibility, cushioning cyclical retail swings and enabling strategic investments.
Read all positive factors
Lowe's Key Performance Indicators (KPIs)
Any
Customer Transactions
Tracks the number of purchases made by customers, indicating consumer demand, shopping frequency, and overall sales performance.
Tracks the number of purchases made by customers, indicating consumer demand, shopping frequency, and overall sales performance.
Data provided by:
The Fly
The FlyLowe's (LOW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$122.10B
Dividend Yield1.94%
Average Volume (3M)2.57M
Price to Earnings (P/E)37.4
Beta (1Y)0.72
Revenue Growth3.12%
EPS Growth-3.03%
CountryUS
Employees300,000
SectorConsumer Cyclical
Sector Strength84
IndustryHome Improvement
Share Statistics
EPS (TTM)11.87
Shares Outstanding560,062,870
10 Day Avg. Volume2,693,627
30 Day Avg. Volume2,570,848
Financial Highlights & Ratios
PEG Ratio-7.23
Price to Book (P/B)-15.05
Price to Sales (P/S)1.73
P/FCF Ratio19.51
Enterprise Value/Market Cap1.36
Enterprise Value/Revenue1.92
Enterprise Value/Gross Profit5.73
Enterprise Value/Ebitda13.83
Forecast
1Y Price Target
$278.67Price Target Upside10.71% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering23
EPS Forecast (FY)12.58
Revenue Forecast (FY)$93.24B
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 p...
How the Company Makes Money
Lowe's primarily makes money by selling home improvement and maintenance products to consumers and Pro customers through its retail stores and e-commerce platforms, generating revenue from merchandise sales across major categories (e.g., appliance...
Lowe's Earnings Call Summary
Earnings Call Date:May 20, 2026
(Q1-2026)
| Next Earnings Date:Aug 19, 2026
Earnings Call Sentiment Positive
The call conveyed a cautiously constructive tone: Lowe's reported solid top-line growth (including a 10.3% increase in sales driven partly by acquisitions), positive comparable sales (+0.6%), strong online and Pro momentum, meaningful free cash flow generation and progress on productivity and AI initiatives. However, the quarter included margin compression (gross margin -70 bps, adjusted operating margin -43 bps), a decline in transactions, inventory and cost pressures linked to acquisitions, tariffs and fuel, and guidance that flags near-term margin and EPS pressure for Q2. Management reaffirmed FY26 guidance and emphasized strategic investments (Total Home, Pro, Home Services, AI) and deleveraging priorities. Overall, positives (growth, cash generation, AI/loyalty traction, acquisition progress) slightly outweigh the near-term challenges and macro risks.Positive Updates
AI Adoption and Impact (Mylow & Companion)
Mylow (customer-facing) now supports over 1 million customer inquiries per month with a conversion rate three times higher for users; Mylow Companion (associate-facing) logged over 5 million associate questions since launch and is driving measurable productivity and customer satisfaction improvements.
Negative Updates
Margin Pressure
Gross margin contracted to 32.7% (down 70 basis points) and adjusted operating margin rate fell to 11.5% (down 43 basis points year-over-year), with management citing dilutive impact of acquisitions and cost pressures.
Read all updates
Q1-2026 Updates
Positive
Negative
AI Adoption and Impact (Mylow & Companion)
Mylow (customer-facing) now supports over 1 million customer inquiries per month with a conversion rate three times higher for users; Mylow Companion (associate-facing) logged over 5 million associate questions since launch and is driving measurable productivity and customer satisfaction improvements.
Read all positive updates
Company Guidance
Lowe’s affirmed fiscal 2026 guidance and provided quarterly context: full‑year sales $92.0–$94.0 billion, comparable sales flat to +2%, adjusted operating margin 11.6%–11.8%, adjusted diluted EPS $12.25–$12.75 and capital expenditures up to $2.5 billion, while targeting a 2.75x leverage ratio by mid‑2027; Q2 comps are expected roughly at the midpoint of the full‑year guide (about +1%), Q2 adjusted operating margin is expected to be pressured and Q2 adjusted diluted EPS is forecast to be ~2% below prior year. Management cited Q1 results that underpin the outlook: Q1 sales $23.1 billion, comps +0.6% (Feb -1.4%, Mar +2.1%, Apr +0.5%), GAAP diluted EPS $2.90 and adjusted diluted EPS $3.03 (+3.8% Y/Y), gross margin 32.7% (-70 bps), SG&A 19.2% (-17 bps), adjusted operating margin 11.5% (-43 bps), effective tax rate 24.5%, inventory $18.4 billion (+$112M Y/Y including ~ $500M from acquisitions), free cash flow $2.8 billion, Q1 CapEx $521 million, dividends paid $674 million ($1.20/share), $2.4 billion of bond maturities repaid, adjusted debt/EBITDAR 3.1x, cash $786 million, ROIC 26.8%, and $96 million pretax acquisition‑related amortization; management emphasized ongoing PPI/productivity initiatives (targeting ~$1 billion of benefits) to offset cost and tariff/fuel pressures.Lowe's Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
38
Negative
Cash Flow
80
Positive
| Breakdown | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 86.29B | 83.67B | 86.38B | 97.06B | 96.25B |
| Gross Profit | 28.89B | 26.15B | 27.13B | 30.49B | 30.39B |
| EBITDA | 10.69B | 12.59B | 13.57B | 12.69B | 14.47B |
| Net Income | 6.65B | 6.96B | 7.73B | 6.44B | 8.44B |
Balance Sheet | |||||
| Total Assets | 54.14B | 44.57B | 43.36B | 45.27B | 46.33B |
| Cash, Cash Equivalents and Short-Term Investments | 1.35B | 2.13B | 1.23B | 1.73B | 1.40B |
| Total Debt | 7.19B | 39.68B | 40.15B | 37.99B | 29.38B |
| Total Liabilities | 64.06B | 58.80B | 58.41B | 59.53B | 51.15B |
| Stockholders Equity | -9.92B | -14.23B | -15.05B | -14.25B | -4.82B |
Cash Flow | |||||
| Free Cash Flow | 7.65B | 7.70B | 6.18B | 6.76B | 8.26B |
| Operating Cash Flow | 9.86B | 9.63B | 8.14B | 8.59B | 10.11B |
| Investing Cash Flow | -12.26B | -1.74B | -1.90B | -1.31B | -1.65B |
| Financing Cash Flow | 1.62B | -7.05B | -6.67B | -7.05B | -12.02B |
Lowe's Technical Analysis
Negative
251.72
Price Trends
235.44
Negative
250.32
Negative
247.21
Negative
Market Momentum
-6.04
Positive
35.61
Neutral
9.24
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LOW, the sentiment is Negative. The current price of 251.72 is above the 20-day moving average (MA) of 230.83, above the 50-day MA of 235.44, and above the 200-day MA of 247.21, indicating a bearish trend. The MACD of -6.04 indicates Positive momentum. The RSI at 35.61 is Neutral, neither overbought nor oversold. The STOCH value of 9.24 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LOW.
Lowe's Risk Analysis
Lowe's disclosed 25 risk factors in its most recent earnings report. Lowe's reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Lowe's Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $19.92B | 17.32 | 51.45% | 1.37% | 1.24% | -1.80% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
59 Neutral | $298.62B | 36.51 | 113.30% | 2.67% | 2.23% | -4.48% | |
58 Neutral | $12.20B | 6.35 | 38.54% | 5.46% | 0.39% | 17.90% | |
58 Neutral | $16.64B | 35.89 | 42.57% | 1.80% | 4.64% | 1.15% | |
56 Neutral | $122.10B | 37.36 | -59.21% | 1.94% | 3.12% | -3.03% | |
53 Neutral | $4.86B | 35.69 | 8.38% | ― | 3.46% | -3.01% |
* Consumer Cyclical Sector Average
LOW
Lowe's
218.37
-4.61
-2.07%
BBY
Best Buy Co
59.29
-7.12
-10.72%
HD
Home Depot
302.44
-59.26
-16.38%
TSCO
Tractor Supply
31.14
-18.05
-36.69%
WSM
Williams-Sonoma
171.76
6.26
3.78%
FND
Floor & Decor Holdings
44.22
-30.20
-40.58%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.