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A Look at Lowe's Companies Inc (LOW) After 4.0% Gain -- GF Value $254.41 vs Price $204.37

On October 22, 2026, Lowe's Companies Inc LOW shares rose 4.0% to $204.37, reflecting a positive shift amidst a challenging year. The stock has traded within a 52-week range of $178.45 to $293.06, indicating notable volatility.

GF Value™ verdict: Current price is $204.37 vs GF Value™ of $254.41, indicating the stock is 19.7% undervalued. GF Score™: 78/100, suggesting an above-average investment opportunity. Most notable signal: Insider activity shows a net selling of $12.9M over the past 12 months. Is LOW Overvalued or Undervalued? The current market price of Lowe's Companies Inc at $204.37 is significantly below the GuruFocus GF Value™ estimate of $254.41, which suggests that the stock is undervalued by approximately 19.7%. This margin of safety may present an attractive opportunity for potential investors. GF Value™ is derived from a combination of historical trading multiples, past business performance, and future growth projections, offering a comprehensive intrinsic value assessment.

While the undervaluation suggests a favorable entry point, investors should consider the broader market trends and potential risks, particularly given Lowe's year-to-date decline of 13.4%. The GF Valuation label indicates that the stock is modestly undervalued, which aligns with the opportunity presented by the current price relative to the GF Value™ estimate.

How Does LOW's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 17.3x 19.4x Forward P/E 15.8x N/A Currently, Lowe's P/E ratio of 17.3x is below its 5-year median of 19.4x, indicating the stock is trading at a discount to its historical valuation. This assessment aligns with the GF Value™ conclusion of the stock being undervalued, suggesting that the current price may not fully reflect the company’s earnings potential.

What Does LOW's GF Score™ Tell Us? GF Score™ serves as an overall assessment of a stock's quality, factoring in financial strength, profitability, growth, valuation, and momentum. Lowe's GF Score™ of 78/100 indicates a solid investment profile, with notable strengths in profitability and valuation, while momentum is relatively weaker.

Metric Rating GF Score™ 78 Financial Strength 4/10 Profitability 8/10 Growth 6/10 Valuation 8/10 Momentum 4/10 Lowe's strongest area is profitability, highlighted by a high score of 8/10, while its financial strength is the weakest link with a score of only 4/10. This disparity suggests that while the company is generating solid profits, it may face challenges in terms of financial stability and resilience.

What Are Gurus and Insiders Doing with LOW? Currently, 12 gurus hold positions in Lowe's stock, with 8 increasing their stakes while 3 have trimmed their holdings. This indicates a generally positive sentiment among seasoned investors who are willing to bolster their positions despite some recent volatility. This trend is a noteworthy signal, as it reflects confidence from knowledgeable market participants.

On the insider front, there has been significant selling activity, with insiders selling $13.2M worth of stock compared to only $0.2M in purchases, resulting in a net selling of $12.9M. This pattern raises questions about insider confidence in the company's future performance and may warrant further examination by potential investors.

What This Means for Investors Based on the GF Value™ analysis, Lowe's Companies Inc appears to be undervalued at its current price of $204.37 relative to the estimated fair value of $254.41. However, the significant insider selling and market trends indicate that potential investors should tread carefully and consider both the opportunities and risks associated with this investment. For more detailed insights, you can visit the Lowe's Companies Inc LOW stock page and explore additional resources such as the GF Value™ page.

Frequently Asked Questions What is LOW's GF Score™?

Lowe's GF Score™ is 78/100, indicating an above-average investment opportunity based on a range of fundamental factors.

Is LOW overvalued or undervalued?

According to the GF Value™, Lowe's is currently undervalued, with a fair value estimate of $254.41 compared to a market price of $204.37.

What is LOW's P/E ratio?

Lowe's P/E ratio is 17.3x, which is below its 5-year median of 19.4x, suggesting the stock is trading at a discount compared to its historical valuation.

This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].

Disclosures
I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.

Lowe's (LOW - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.

Over the past month, shares of this home improvement retailer have returned +2.6%, compared to the Zacks S&P 500 composite's +0.7% change. During this period, the Zacks Retail - Home Furnishings industry, which Lowe's falls in, has gained 2.8%. The key question now is: What could be the stock's future direction?

Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.

Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.

Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.

For the current quarter, Lowe's is expected to post earnings of $2.86 per share, indicating a change of -6.5% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.7% over the last 30 days.

The consensus earnings estimate of $12.26 for the current fiscal year indicates a year-over-year change of -0.2%. This estimate has remained unchanged over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $13.03 indicates a change of +6.3% from what Lowe's is expected to report a year ago. Over the past month, the estimate has changed -0.1%.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Lowe's is rated Zacks Rank #4 (Sell).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

In the case of Lowe's, the consensus sales estimate of $22.37 billion for the current quarter points to a year-over-year change of +7.5%. The $91.99 billion and $94.3 billion estimates for the current and next fiscal years indicate changes of +6.6% and +2.5%, respectively.

Last Reported Results and Surprise HistoryLowe's reported revenues of $25.96 billion in the last reported quarter, representing a year-over-year change of +8.3%. EPS of $4.4 for the same period compares with $4.33 a year ago.

Compared to the Zacks Consensus Estimate of $26.13 billion, the reported revenues represent a surprise of -0.68%. The EPS surprise was +4.27%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates two times over this period.

ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Lowe's is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Lowe's. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term.

One retailer hands retirees a bigger check today while the other quietly positions itself to deliver faster raises for years to come, and frozen housing makes picking the wrong one a costly mistake.

Lowe’s Companies, Inc. (NYSE:LOW – Get Free Report) saw unusually large options trading activity on Thursday. Stock traders acquired 13,431 call options on the stock. This is an increase of approximately 63% compared to the average volume of 8,224 call options.

Analyst Upgrades and Downgrades Several equities research analysts have recently commented on LOW shares. Sanford C. Bernstein lowered their price objective on shares of Lowe’s Companies from $261.00 to $254.00 and set an “outperform” rating for the company in a research note on Wednesday, September 9th. Melius Research set a $244.00 price target on Lowe’s Companies in a research note on Tuesday, October 6th. DA Davidson reissued a “neutral” rating and issued a $245.00 price objective on shares of Lowe’s Companies in a report on Wednesday, August 19th. KeyCorp restated an “overweight” rating and issued a $275.00 price objective on shares of Lowe’s Companies in a research note on Thursday, August 20th. Finally, Mizuho decreased their target price on Lowe’s Companies from $280.00 to $250.00 and set an “outperform” rating for the company in a report on Thursday, August 20th. One research analyst has rated the stock with a Strong Buy rating, twenty-two have issued a Buy rating, twelve have issued a Hold rating and two have assigned a Sell rating to the company’s stock. Based on data from MarketBeat, the company currently has a consensus rating of “Moderate Buy” and a consensus price target of $254.29.

Get Our Latest Stock Report on Lowe’s Companies

Trending Headlines about Lowe’s Companies Here are the key news stories impacting Lowe’s Companies this week: Positive Sentiment: Unusual options activity suggests increased bullish positioning: traders purchased 13,431 LOW call options, 63% above the typical daily volume of 8,224 contracts. This may be contributing to near-term buying interest, although options activity can be speculative. Positive Sentiment: Lowe’s is expanding its Black Friday savings events and adding exclusive rewards-member benefits, which could help drive holiday traffic, customer engagement and seasonal sales. Lowe’s makes major Black Friday changes shoppers should know Positive Sentiment: The company’s dividend track record and focus on professional contractors continue to support its appeal to income-oriented investors. Its dividend has doubled since 2021, while its broad store network and customer relationships provide business resilience. Lowe’s Dividend Sustainability Looks Solid, but Returns Face a Test Positive Sentiment: A planned 2027 Lowe’s rollout for Traeger products could create an additional merchandising and sales opportunity, though the financial impact is still ahead. Traeger: Waiting For The Lowe’s Rollout In 2027 Neutral Sentiment: Home Depot’s higher average ticket, resilient professional demand and big-ticket sales growth offer a constructive read-through for the home-improvement sector, but the report also highlights softer customer visits and housing-market pressure. Home Depot’s Rising Average Ticket Offsets Softer Customer Visits Negative Sentiment: Analysts continue to flag cautious customers, intensified promotional competition and Lowe’s decision not to fully match competitors’ discounts. A frozen housing market and acquisition-related debt could also pressure cash flow and make continued dividend growth more difficult. What Could Derail Lowe’s Stock? Lowe’s Keeps Raising Its Dividend. A Frozen Housing Market Could Test That Streak Lowe’s Companies Trading Up 4.0% Shares of LOW stock opened at $195.86 on Friday. The stock has a 50 day moving average of $199.96 and a 200 day moving average of $214.95. The stock has a market cap of $109.89 billion, a P/E ratio of 15.10, a P/E/G ratio of 1.57 and a beta of 0.89. Lowe’s Companies has a twelve month low of $178.45 and a twelve month high of $293.06.

Lowe’s Companies (NYSE:LOW – Get Free Report) last posted its earnings results on Wednesday, August 19th. The home improvement retailer reported $4.40 earnings per share for the quarter, beating the consensus estimate of $4.22 by $0.18. The firm had revenue of $25.96 billion during the quarter, compared to analyst estimates of $26.13 billion. Lowe’s Companies had a net margin of 7.34% and a negative return on equity of 75.67%. The business’s quarterly revenue was up 8.3% on a year-over-year basis. During the same period in the previous year, the firm earned $4.33 EPS. Lowe’s Companies has set its FY 2026 guidance at 12.250-12.250 EPS. On average, research analysts predict that Lowe’s Companies will post 12.26 earnings per share for the current fiscal year.

Lowe’s Companies Announces Dividend The firm also recently announced a quarterly dividend, which will be paid on Wednesday, November 4th. Stockholders of record on Wednesday, October 21st will be given a dividend of $1.25 per share. The ex-dividend date is Wednesday, October 21st. This represents a $5.00 dividend on an annualized basis and a dividend yield of 2.6%. Lowe’s Companies’s dividend payout ratio (DPR) is 42.27%.

Institutional Trading of Lowe’s Companies A number of institutional investors and hedge funds have recently made changes to their positions in the business. BlackRock Inc. grew its stake in Lowe’s Companies by 1.8% in the 2nd quarter. BlackRock Inc. now owns 40,545,728 shares of the home improvement retailer’s stock valued at $8,939,928,000 after acquiring an additional 714,092 shares during the period. State Street Corp lifted its stake in Lowe’s Companies by 3.6% in the 2nd quarter. State Street Corp now owns 25,329,373 shares of the home improvement retailer’s stock valued at $5,584,873,000 after buying an additional 880,815 shares in the last quarter. Bank of New York Mellon Corp lifted its stake in Lowe’s Companies by 1.4% in the 2nd quarter. Bank of New York Mellon Corp now owns 4,104,782 shares of the home improvement retailer’s stock valued at $905,063,000 after buying an additional 57,167 shares in the last quarter. Amundi boosted its holdings in Lowe’s Companies by 57.3% in the 2nd quarter. Amundi now owns 2,892,868 shares of the home improvement retailer’s stock worth $637,848,000 after buying an additional 1,053,237 shares during the last quarter. Finally, Swiss National Bank boosted its holdings in Lowe’s Companies by 7.1% in the 1st quarter. Swiss National Bank now owns 1,646,320 shares of the home improvement retailer’s stock worth $388,992,000 after buying an additional 109,520 shares during the last quarter. 74.06% of the stock is currently owned by hedge funds and other institutional investors.

Lowe’s Companies Company Profile (Get Free Report)

Lowe’s Companies, Inc is a home improvement retailer serving homeowners, renters, and professional contractors primarily in the United States. The company operates through a network of retail stores and digital channels, offering products and services for home repair, maintenance, remodeling, construction, and outdoor living.

Its merchandise includes appliances, tools, hardware, lumber, building materials, plumbing and electrical supplies, paint, flooring, kitchen and bath products, lighting, home décor, lawn and garden equipment, and seasonal goods.

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Fragasso Financial Advisors Inc decreased its stake in shares of Lowe’s Companies, Inc. (NYSE:LOW – Free Report) by 49.6% in the 3rd quarter, according to the company in its most recent filing with the Securities & Exchange Commission. The firm owned 5,875 shares of the home improvement retailer’s stock after selling 5,793 shares during the quarter. Fragasso Financial Advisors Inc’s holdings in Lowe’s Companies were worth $1,093,000 as of its most recent filing with the Securities & Exchange Commission.

Several other hedge funds also recently modified their holdings of LOW. Sankala Group LLC bought a new position in Lowe’s Companies during the fourth quarter worth $33,000. Markowski Investments acquired a new stake in Lowe’s Companies in the second quarter worth $33,000. IAG Wealth Partners LLC increased its stake in Lowe’s Companies by 178.6% in the first quarter. IAG Wealth Partners LLC now owns 156 shares of the home improvement retailer’s stock valued at $37,000 after purchasing an additional 100 shares in the last quarter. Provenance Wealth Advisors LLC increased its stake in Lowe’s Companies by 416.7% in the first quarter. Provenance Wealth Advisors LLC now owns 186 shares of the home improvement retailer’s stock valued at $44,000 after purchasing an additional 150 shares in the last quarter. Finally, Legacy Wealth Managment LLC ID increased its stake in Lowe’s Companies by 219.7% in the first quarter. Legacy Wealth Managment LLC ID now owns 195 shares of the home improvement retailer’s stock valued at $46,000 after purchasing an additional 134 shares in the last quarter. Institutional investors own 74.06% of the company’s stock.

Wall Street Analyst Weigh In Several equities analysts have recently weighed in on LOW shares. Gordon Haskett lowered shares of Lowe’s Companies from a “buy” rating to a “hold” rating and set a $200.00 price objective on the stock. in a report on Thursday, September 24th. Citigroup cut their price objective on shares of Lowe’s Companies from $267.00 to $260.00 and set a “buy” rating on the stock in a research report on Thursday, August 20th. Truist Financial reduced their target price on Lowe’s Companies from $255.00 to $254.00 and set a “buy” rating for the company in a research note on Thursday, August 20th. Weiss Ratings lowered Lowe’s Companies from a “hold (c)” rating to a “hold (c-)” rating in a research report on Monday, August 17th. Finally, Mizuho decreased their target price on Lowe’s Companies from $280.00 to $250.00 and set an “outperform” rating for the company in a research report on Thursday, August 20th. One investment analyst has rated the stock with a Strong Buy rating, twenty-two have issued a Buy rating, twelve have assigned a Hold rating and two have assigned a Sell rating to the company’s stock. According to data from MarketBeat, the company presently has an average rating of “Moderate Buy” and an average target price of $254.29.

Check Out Our Latest Stock Report on LOW Lowe’s Companies Stock Up 1.7% Shares of NYSE:LOW opened at $188.75 on Wednesday. Lowe’s Companies, Inc. has a twelve month low of $178.45 and a twelve month high of $293.06. The stock’s 50 day moving average is $201.04 and its 200-day moving average is $215.53. The firm has a market capitalization of $105.90 billion, a price-to-earnings ratio of 15.96, a PEG ratio of 1.55 and a beta of 0.89.

Lowe’s Companies (NYSE:LOW – Get Free Report) last posted its quarterly earnings results on Wednesday, August 19th. The home improvement retailer reported $4.40 earnings per share (EPS) for the quarter, beating the consensus estimate of $4.22 by $0.18. The business had revenue of $25.96 billion during the quarter, compared to the consensus estimate of $26.13 billion. Lowe’s Companies had a net margin of 7.34% and a negative return on equity of 75.67%. Lowe’s Companies’s revenue was up 8.3% compared to the same quarter last year. During the same quarter last year, the firm posted $4.33 EPS. Lowe’s Companies has set its FY 2026 guidance at 12.250-12.250 EPS. Equities research analysts anticipate that Lowe’s Companies, Inc. will post 12.26 earnings per share for the current fiscal year.

Lowe’s Companies Dividend Announcement The firm also recently disclosed a quarterly dividend, which will be paid on Wednesday, November 4th. Shareholders of record on Wednesday, October 21st will be paid a $1.25 dividend. This represents a $5.00 dividend on an annualized basis and a dividend yield of 2.6%. The ex-dividend date of this dividend is Wednesday, October 21st. Lowe’s Companies’s dividend payout ratio (DPR) is 42.27%.

(Free Report)

Lowe’s Companies, Inc is a home improvement retailer serving homeowners, renters, and professional contractors primarily in the United States. The company operates through a network of retail stores and digital channels, offering products and services for home repair, maintenance, remodeling, construction, and outdoor living.

Its merchandise includes appliances, tools, hardware, lumber, building materials, plumbing and electrical supplies, paint, flooring, kitchen and bath products, lighting, home décor, lawn and garden equipment, and seasonal goods.

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JGP Wealth Management LLC cut its holdings in shares of Lowe's Companies, Inc. (NYSE: LOW) by 15.0% during the third quarter, according to its most recent 13F filing with the Securities and Exchange Commission. The fund owned 43,559 shares of the home improvement retailer's stock after selling 7,706 shares during the quarter. JGP

Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?

Let's take a look at what these Wall Street heavyweights have to say about Lowe's (LOW - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.

Lowe's currently has an average brokerage recommendation (ABR) of 1.77, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 32 brokerage firms. An ABR of 1.77 approximates between Strong Buy and Buy.

Of the 32 recommendations that derive the current ABR, 20 are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 62.5% and 3.1% of all recommendations.

Brokerage Recommendation Trends for LOW

Check price target & stock forecast for Lowe's here>>>

While the ABR calls for buying Lowe's, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.

Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.

In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.

With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.

Zacks Rank Should Not Be Confused With ABRAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.

The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.

Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.

In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.

In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.

Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements.

Is LOW a Good Investment?Looking at the earnings estimate revisions for Lowe's, the Zacks Consensus Estimate for the current year has declined 0% over the past month to $12.26.

Analysts' growing pessimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates lower, could be a legitimate reason for the stock to plunge in the near term.

The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #4 (Sell) for Lowe's. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Therefore, it could be wise to take the Buy-equivalent ABR for Lowe's with a grain of salt.

Lowe's comparable sales growth is sitting at 0.2% - primarily driven by pricing - way below the current inflation levels. Low consumer confidence and low existing home sales in the U.S. are likely to keep negatively influencing the demand for LOW's products. Valuation metrics suggest LOW trades at reasonable levels relative to sector peers, with dividend yield enhancing total return potential.

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Lowe's (LOW - Free Report) ended the recent trading session at $183.67, demonstrating a +2.32% change from the preceding day's closing price. The stock's change was more than the S&P 500's daily gain of 0.58%. At the same time, the Dow added 0.49%, and the tech-heavy Nasdaq gained 0.45%.

Heading into today, shares of the home improvement retailer had lost 12.2% over the past month, lagging the Retail-Wholesale sector's loss of 4.5% and the S&P 500's gain of 0.84%.

The investment community will be paying close attention to the earnings performance of Lowe's in its upcoming release. The company is slated to reveal its earnings on November 18, 2026. The company's upcoming EPS is projected at $2.86, signifying a 6.54% drop compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $22.37 billion, up 7.46% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates project earnings of $12.26 per share and a revenue of $91.99 billion, demonstrating changes of -0.24% and +6.61%, respectively, from the preceding year.

Investors should also note any recent changes to analyst estimates for Lowe's. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.01% lower within the past month. As of now, Lowe's holds a Zacks Rank of #4 (Sell).

In terms of valuation, Lowe's is currently trading at a Forward P/E ratio of 14.64. This represents a discount compared to its industry average Forward P/E of 16.8.

Meanwhile, LOW's PEG ratio is currently 1.5. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. By the end of yesterday's trading, the Retail - Home Furnishings industry had an average PEG ratio of 1.45.

The Retail - Home Furnishings industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 112, which puts it in the top 46% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

The home improvement industry is barely growing after booming sales during the pandemic.

*Stock prices used were the afternoon prices of Sept. 28, 2026. The video was published on Sept. 30, 2026.

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool recommends Lowe's Companies. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

Both home improvement giants have taken a beating this year, but one stock offers retirement investors far more than a discounted price tag, and the difference comes down to where each company stands when the housing market stays frozen.

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Home Depot (NYSE:HD | HD Price Prediction) orLowe’s (NYSE:LOW): Which home improvement stock should a retirement-focused investor own heading into the fourth quarter? Home Depot wins, and the gap is wider than Lowe’s discounted multiple suggests. Both stocks have fallen hard this year. Home Depot is down 15.15% year to date as of Monday morning, Sept. 28, while Lowe’s is down 23.57%.

That makes the choice sharper. The question is which business deserves a permanent spot in an income portfolio.

Housing Demand Backdrop: Home Depot Is Executing Through the Freeze Both chains face the same stalled housing market. Existing home sales dropped to 3.98M annualized in August, the lowest reading in the past year, and housing starts slipped 2.6% to 1.27M. Home Depot’s Richard McPhail said housing turnover “has never been lower as a percentage of the housing stock.”

Execution separates them. Home Depot’s Q2 comps rose 1.7%, July sped up to 2.3%, and management reaffirmed full-year guidance. McPhail added, “We have had a start to Q3 that’s really consistent with the demand we saw in the second quarter.”

Lowe’s posted Q2 comps of 0.2%, saw July comps fall 1.2%, and cut its outlook to the low end: flat comps and adjusted EPS of about $12.25. For a Q4 holder, it gets worse. Lowe’s Brandon Sink said fourth-quarter comps are “implied negative,” with a winter storm comparison creating about a 50 basis point drag.

Winner: Home Depot.

Profitability and Returns: Home Depot’s Balance Sheet Buys Peace of Mind Home Depot runs a 12.7% operating margin and 8.6% net margin, against 11.77% and 7.71% at Lowe’s. Lowe’s earns a stronger return on invested capital (ROIC, profit generated per dollar of capital) at 13.3% versus 6.8%, a genuine point in its favor.

Leverage decides this round. Lowe’s has net debt of 3.54 times EBITDA versus 2.65 for Home Depot, with interest coverage of 6.65 against 8.66. Lowe’s also faces about $1.6B in FY26 interest expense, $96M to $149M in quarterly intangible amortization from its acquisitions, and negative shareholders’ equity from buybacks. Its ADG unit is 100% exposed to residential construction. Retirees need margin of safety more than capital efficiency.

Winner: Home Depot.

Dividend and Valuation: Income Tilts the Scale Lowe’s is cheaper, trading at 16x earnings versus 21x for Home Depot, with a free cash flow yield of 7.21% against 4.32%. Value hunters will notice.

Retirees cash dividend checks, though. Home Depot yields 3.13% on a $2.33 quarterly payout ($9.32 annualized), noting its 156th consecutive quarter of cash dividends. Lowe’s yields 2.48% on a $1.25 quarterly payout. Home Depot’s February raise was a modest 1.3%, but the starting yield is significantly higher and backed by $12.65 billion in FY25 free cash flow.

Winner: Home Depot.

Verdict: Home Depot Is the Retirement Pick for Q4 Home Depot takes all three categories. It has the stronger demand trends, the safer balance sheet, and the fatter dividend. Management expects Q4 gross margin “relatively flat versus last year,” a steady setup while Lowe’s guides to negative comps.

Lowe’s suits a different investor: a longer-horizon value buyer who wants the cheapest exposure to a housing rebound and can handle leverage. Its 10-year gain of more than 165% edges Home Depot’s 132.50%, and its CEO mentions an estimated $20 and $50 billion of pent-up project demand. If mortgage rates break lower, Lowe’s rebounds harder. Until that happens, the retiree’s stock is Home Depot. Watch existing home sales and building permits for the first sign that the freeze is thawing.

Contact [email protected] for any questions or corrections.

The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?

Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Lowe's (LOW - Free Report) .

Lowe's currently has an average brokerage recommendation (ABR) of 1.73, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 31 brokerage firms. An ABR of 1.73 approximates between Strong Buy and Buy.

Of the 31 recommendations that derive the current ABR, 20 are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 64.5% and 3.2% of all recommendations.

Brokerage Recommendation Trends for LOW

Check price target & stock forecast for Lowe's here>>>

The ABR suggests buying Lowe's, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.

Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.

This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.

With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.

Zacks Rank Should Not Be Confused With ABRIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.

The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.

Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.

In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.

Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.

Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements.

Is LOW Worth Investing In?Looking at the earnings estimate revisions for Lowe's, the Zacks Consensus Estimate for the current year has declined 0% over the past month to $12.27.

Analysts' growing pessimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates lower, could be a legitimate reason for the stock to plunge in the near term.

The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #4 (Sell) for Lowe's. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Therefore, it could be wise to take the Buy-equivalent ABR for Lowe's with a grain of salt.

Lowe's (LOW - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.

Shares of this home improvement retailer have returned -12% over the past month versus the Zacks S&P 500 composite's +1.3% change. The Zacks Retail - Home Furnishings industry, to which Lowe's belongs, has lost 10.8% over this period. Now the key question is: Where could the stock be headed in the near term?

Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.

Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

Lowe's is expected to post earnings of $2.88 per share for the current quarter, representing a year-over-year change of -5.9%. Over the last 30 days, the Zacks Consensus Estimate has changed -2.8%.

For the current fiscal year, the consensus earnings estimate of $12.27 points to a change of -0.2% from the prior year. Over the last 30 days, this estimate has remained unchanged.

For the next fiscal year, the consensus earnings estimate of $13.04 indicates a change of +6.3% from what Lowe's is expected to report a year ago. Over the past month, the estimate has changed -0.6%.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Lowe's is rated Zacks Rank #4 (Sell).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Projected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.

For Lowe's, the consensus sales estimate for the current quarter of $22.39 billion indicates a year-over-year change of +7.6%. For the current and next fiscal years, $92.03 billion and $94.4 billion estimates indicate +6.7% and +2.6% changes, respectively.

Last Reported Results and Surprise HistoryLowe's reported revenues of $25.96 billion in the last reported quarter, representing a year-over-year change of +8.3%. EPS of $4.4 for the same period compares with $4.33 a year ago.

Compared to the Zacks Consensus Estimate of $26.13 billion, the reported revenues represent a surprise of -0.68%. The EPS surprise was +4.27%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates two times over this period.

ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Lowe's is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Lowe's. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term.

Pershing Square CEO Bill Ackman warned that "hell is coming" in March 2020 before executing a $27 million credit hedge that generated $2.6 billion in proceeds, which he subsequently redeployed into equities during the COVID-19 market crash.

The Misunderstood WarningDuring a 28-minute CNBC segment in 2020, Ackman recounted a private conversation he held with Hilton Hotels Corp. (NYSE:HLT) leadership. Ackman advised the company to draw down credit lines, deposit cash, and defer capital expenditures because a global economic shutdown was imminent. “Hell is coming,” Ackman stated.

The "hell is coming" portion of the interview drew significant attention as U.S. stocks were plunging.

The broader market was down 6% when Ackman began his interview and dropped to 10% by the time he finished. Despite the public reaction, Ackman maintained his appearance was intended to signal market opportunity.

He stated in the CAZ Investments podcast with Tony Robbins, on Sept. 8, 2026, that he went on television to announce Pershing Square was actively “buying stocks.” He advised the U.S. president to mandate a 30-day national “spring break” to let the virus pass, arguing that such a policy would stabilize the country and present an unprecedented buying window.

Read Next

Executing the $2.6 Billion HedgeAckman said in the podcast that he began tracking the health and economic risks of COVID-19 in January 2020. Concluding by February that the global economy would need to close, he built a large defensive position in the credit default swap (CDS) market.

When global markets plunged just two weeks later, this $27 million investment turned into $2.6 billion.

A Contrarian Shopping SpreeRather than holding the cash, Ackman redirected the $2.6 billion windfall into the equity market in March 2020. Pershing Square purchased shares across its existing portfolio, securing positions in Hilton at $55 a share and home improvement retailer Lowe’s Companies Inc. (NYSE:LOW) at $70 a share, said Ackman.

Ackman credited Pershing Square’s permanent-capital structure with giving him flexibility to invest during the market turmoil.

Because he did not face short-term redemption pressures from investors, he could ignore the immediate volatility and purchase durable businesses at steep discounts while the rest of the market panicked.

How Have Markets Performed Since the COVID-19 Crash?The COVID-19 crash began on Feb. 20, 2020, when the S&P 500 index closed at 3,373.23, now 126.42% higher at 7,637.76 points. Similarly, the Nasdaq 100 has risen from 9,627.83 to 29,446.98, a 205.85% change, and the Dow Jones Index gained 77.20% from 29,219.98 to 51,778.04 points.

In 2026, the S&P 500 index has advanced 11.36% year-to-date. Similarly, the Nasdaq Composite index was up 13.70%, and the Dow Jones gained 7.02% YTD.

On Thursday, the SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 and Nasdaq-100, respectively, closed higher. SPY rose 1.13% to $762.60, while QQQ rose 1.73% to $716.92. Meanwhile, the Dow tracker, State Street SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA), also ended 0.61% higher at $518.35.

Read Next

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo courtesy: Things on Shutterstock.com

© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Retail Earnings Just Exposed a Bigger Divide in the U.S. Consumer EconomyLowe's Companies NYSE: LOW expects the second half of the year to resemble the first half as elevated interest rates and broader uncertainty continue to affect home-improvement spending, Chairman, President and Chief Executive Officer Marvin Ellison said at the Goldman Sachs Global Consumer and Retail Conference.

Ellison said the company does not expect a material change in the housing backdrop during the balance of the year, but said Lowe's believes it can grow and gain market share regardless of macroeconomic conditions. He pointed to five consecutive quarters of positive comparable sales growth and digital sales growth exceeding 15% in each of the past two quarters.

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MarketBeat Week in Review – 08/24 - 08/28More than 60% of Lowe's sales are driven by do-it-yourself customers, Ellison said. While the company's core homeowner customer has an average household income above $100,000 and roughly $400,000 in equity, those consumers have become more cautious about larger discretionary purchases amid higher interest rates and geopolitical uncertainty.

Smaller Projects Replace Some Major Renovations Ellison said homeowners are pursuing smaller, more deliberate projects rather than undertaking full kitchen or bathroom renovations at the same frequency seen before the current housing cycle. Customers may buy countertops or cabinets instead of completing an entire kitchen remodel, he said.

Why Lowe’s Could Be a Bargain Before Housing RecoversLowe's has invested in in-store kitchen, bath, appliance and flooring showrooms under its Total Home Strategy, Ellison said. He added that small- and medium-sized professional customers have remained resilient by adapting their work to consumers' budgets and project scopes.

The company sees a broad competitive landscape beyond its largest rival, according to Ellison. Lowe's estimates the home-improvement market at roughly $1 trillion, while Lowe's and its largest competitor together account for about $250 billion of that market. He said smaller regional players represent another opportunity for Lowe's to gain share.

Appliances have been a particular source of share gains, Ellison said. He said Lowe's is the only U.S. retailer capable of delivering and installing major appliances on the same day or next day in virtually every U.S. ZIP code. That capability is particularly important in “duress” purchases, such as when a refrigerator breaks and requires immediate replacement.

Pricing, Delivery and Digital Investment Ellison described the promotional environment in the second quarter as one of the most active he has seen in 25 years in home improvement, attributing it in part to companies receiving tariff refunds and using them to provide value to consumers. He characterized that activity as transitory and said Lowe's does not view it as a new normal for the category.

For the second half, he said Lowe's expects its pricing to be “virtually the same” as in the first half. The company plans to remain focused on value without becoming overly promotional, while using separate loyalty programs for DIY and professional customers to offer more targeted member promotions.

Lowe's has also invested in pricing technology after relying on manual spreadsheets when Ellison joined the company in 2018, he said. The retailer now has more sophisticated pricing systems and processes, according to Ellison.

The company’s approximately 1,750 U.S. stores serve as both shopping destinations and fulfillment nodes. Between 60% and 80% of online order fulfillment comes from stores, depending on product category and season, Ellison said. Lowe's is also extending its big-and-bulky delivery network beyond appliances to categories such as riding lawnmowers, grills and patio furniture.

Digital sales rose more than 15% for two straight quarters, supported by improved fulfillment, same-day delivery and the company’s digital marketplace, Ellison said. He said the marketplace allows Lowe's to offer products serving value-oriented and luxury customers without owning the inventory.

Ellison also highlighted Lowe's Mylow artificial intelligence tool. Customers and associates have submitted more than 25 million questions through the tool, he said. Customers using the AI assistant have conversion rates three times higher than those who do not use it, while associates using it have contributed to a 200-basis-point improvement in customer satisfaction, according to Ellison.

Acquisitions Target Construction Opportunity Ellison said Lowe's acquisitions of ADG and FBM expanded the company into construction-related markets where it previously had little exposure, particularly single-family and multifamily construction. ADG focuses primarily on flooring, countertops and cabinets, while FBM focuses on drywall, ceiling systems and insulation.

Combined with Lowe's appliance, faucet and fixture offerings, the businesses create what Ellison called an “interior solutions platform” for builders. Lowe's is already conducting pilots designed to offer builders a broader collection of interior products and potentially help reduce construction and closing times, he said.

Ellison acknowledged that elevated mortgage rates have pressured residential construction. However, he said about 55% of FBM revenue comes from commercial construction, including data centers, sports venues, hotels and university projects. Data-center build-outs are currently one of FBM’s largest segments, he said.

Looking ahead, Lowe's plans to remain opportunistic about tuck-in acquisitions that complement its interior-solutions strategy, Ellison said. The company also plans to prioritize debt reduction toward a 2.75-times leverage ratio, which he said it expects to reach around the midpoint of next year, while continuing dividend payments and potentially revisiting share repurchases after reaching that leverage target.

About Lowe's Companies (NYSE:LOW)Lowe's Companies, Inc is a home improvement retailer that serves homeowners, renters, and professional contractors primarily through stores and digital platforms in the United States. The company sells a broad selection of products for maintenance, repair, remodeling, and construction projects.

Its merchandise includes appliances, tools, hardware, lumber, building materials, plumbing and electrical supplies, paint, flooring, lighting, kitchen and bathroom products, outdoor living items, lawn and garden products, and seasonal goods.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

Should You Invest $1,000 in Lowe's Companies Right Now?Before you consider Lowe's Companies, you'll want to hear this.

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With existing home sales at historic lows and renovations drying up, both Home Depot and Lowe's face the same brutal headwind, but only one dividend has the cushion and growth runway to outlast a frozen housing market.

For an income investor weighing Home Depot (NYSE:HD | HD Price Prediction) against Lowe’s (NYSE:LOW), the real question is which dividend holds up better when the housing market stays frozen. Existing home sales sit at 3.98M annualized, the lowest reading in the trailing twelve-month history and inside what the series classifies as the soft range associated with high mortgage rates. Home Depot’s CFO said housing turnover has “never been lower as a percentage of the housing stock”. When people stop moving, they stop renovating. That is the identical headwind facing both payouts, and it sharpens the question of which one is actually safer.

Dividend Coverage Against Free Cash Flow Home Depot generates a free cash flow yield of 4.11% against a dividend yield of 2.97%. Full-year free cash flow was $12.65B, down 22.5% from the prior period. The annualized dividend commitment sits at $9.32 per share against adjusted diluted EPS guidance of flat to +4.0% off $14.69. Covered, but the cushion has thinned as free cash flow shrank.

Lowe’s runs a free cash flow yield of 6.93% against a dividend yield of 2.39%. Quarterly free cash flow was $3.1 billion, and dividends paid were $673 million. Adjusted EPS guidance of approximately $12.25 covers an annualized payout of $5 multiple times over. If comparable sales stay flat, as Lowe’s already guides, coverage barely moves. Lowe’s wins this one on the strength of the gap between cash generation and the committed payout.

Pro Versus DIY Customer Mix Home Depot has spent aggressively to lean into the professional contractor. The SRS Distribution footprint runs 1,340+ locations, and management said “Pro posted positive comps and outperformed DIY”. Comparable sales grew 1.7%, and big-ticket transactions over $1,000 rose 2.4%.

Lowe’s remains more exposed to the discretionary DIY customer who cut back first. CEO Marvin Ellison acknowledged “discretionary DIY demand remains under pressure”, and comparable sales grew just 0.2%. The Pro pivot is real, but it is smaller and less mature than Home Depot’s. In a frozen housing market where repair and small-ticket work carries the load, Home Depot’s customer mix wins.

Growth Record of the Payout Home Depot has paid dividends for 156 consecutive quarters, an exceptional record. The most recent raise took the quarterly payout from $2.30 to $2.33, an increase of 1.3%. Continuity is elite. Growth has decelerated to a token bump.

Lowe’s carries Dividend Aristocrat status, and the latest raise took the quarterly payout from $1.20 to $1.25. The trailing progression shows steady step-ups from 1.05 to 1.10 to 1.15 to 1.20 to 1.25. Lowe’s is raising faster off a lower payout ratio, and the runway is longer (we ranked ten of the longest-running raisers by valuation in a free report here: 10 Dividend Kings to Buy Now and Hold Forever). Lowe’s wins.

Verdict Lowe’s is the better dividend for an income-focused investor at or near retirement. It carries the wider free-cash-flow cushion, the larger and more consistent recent raises, and Aristocrat status. Home Depot’s payout is safer than most in retail, but the payout ratio is higher, the last raise was minimal, and the stock has been under heavier pressure, down 25% over the trailing year versus Lowe’s at 26.27%. A low payout ratio is only reassuring if earnings hold, and Lowe’s flat comparable sales guide keeps coverage intact even if the housing freeze extends. What would flip the verdict: a sustained drop in mortgage rates that reignites housing turnover and larger remodels. In that scenario, Home Depot’s Pro-heavy mix and SRS platform take the win. Absent that catalyst, Lowe’s is the more defensible income holding.

Contact [email protected] for any questions or corrections.

Baird Financial Group Inc. lessened its holdings in Lowe’s Companies, Inc. (NYSE:LOW – Free Report) by 6.1% in the second quarter, according to the company in its most recent Form 13F filing with the SEC. The firm owned 192,408 shares of the home improvement retailer’s stock after selling 12,553 shares during the quarter. Baird Financial Group Inc.’s holdings in Lowe’s Companies were worth $42,424,000 as of its most recent SEC filing.

Other institutional investors and hedge funds have also modified their holdings of the company. Stableford Capital II LLC raised its stake in Lowe’s Companies by 2.8% in the 2nd quarter. Stableford Capital II LLC now owns 4,552 shares of the home improvement retailer’s stock worth $1,004,000 after purchasing an additional 125 shares in the last quarter. BayBridge Capital Group LLC bought a new stake in Lowe’s Companies in the 2nd quarter valued at about $358,000. Arizona State Retirement System grew its position in shares of Lowe’s Companies by 1.1% during the 2nd quarter. Arizona State Retirement System now owns 155,407 shares of the home improvement retailer’s stock worth $34,266,000 after purchasing an additional 1,693 shares in the last quarter. Waverly Advisors LLC grew its position in shares of Lowe’s Companies by 3.5% during the 2nd quarter. Waverly Advisors LLC now owns 40,344 shares of the home improvement retailer’s stock worth $8,895,000 after purchasing an additional 1,383 shares in the last quarter. Finally, Empirical Finance LLC increased its holdings in shares of Lowe’s Companies by 3.2% during the second quarter. Empirical Finance LLC now owns 20,973 shares of the home improvement retailer’s stock worth $4,624,000 after purchasing an additional 652 shares during the period. 74.06% of the stock is currently owned by institutional investors and hedge funds.

Wall Street Analysts Forecast Growth A number of equities research analysts have recently weighed in on the stock. Evercore dropped their price target on shares of Lowe’s Companies from $250.00 to $230.00 in a research report on Thursday, May 21st. Royal Bank Of Canada reissued a “sector perform” rating and set a $231.00 price target on shares of Lowe’s Companies in a research report on Thursday, August 20th. Wolfe Research set a $254.00 price objective on Lowe’s Companies in a research note on Thursday, May 21st. Bank of America dropped their price objective on Lowe’s Companies from $260.00 to $257.00 and set a “neutral” rating for the company in a report on Thursday, May 21st. Finally, JPMorgan Chase & Co. cut their target price on Lowe’s Companies from $279.00 to $252.00 and set an “overweight” rating for the company in a research report on Friday, July 31st. Twenty-three investment analysts have rated the stock with a Buy rating, eleven have issued a Hold rating and two have assigned a Sell rating to the stock. According to data from MarketBeat, the stock currently has an average rating of “Moderate Buy” and an average price target of $257.63.

View Our Latest Report on Lowe’s Companies Insider Transactions at Lowe’s Companies In other news, EVP Juliette Pryor sold 9,330 shares of the stock in a transaction dated Wednesday, June 17th. The shares were sold at an average price of $224.81, for a total value of $2,097,477.30. Following the completion of the transaction, the executive vice president owned 16,142 shares of the company’s stock, valued at approximately $3,628,883.02. This represents a 36.63% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, EVP Janice Dupré sold 14,150 shares of the firm’s stock in a transaction that occurred on Tuesday, June 16th. The shares were sold at an average price of $221.90, for a total transaction of $3,139,885.00. Following the completion of the sale, the executive vice president owned 39,785 shares in the company, valued at approximately $8,828,291.50. The trade was a 26.24% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last 90 days, insiders sold 25,980 shares of company stock valued at $5,796,937. 0.29% of the stock is currently owned by insiders.

Lowe’s Companies Price Performance NYSE LOW opened at $198.59 on Thursday. The business has a fifty day moving average price of $212.28 and a two-hundred day moving average price of $225.83. The stock has a market capitalization of $111.42 billion, a PE ratio of 16.79, a PEG ratio of 2.67 and a beta of 0.85. Lowe’s Companies, Inc. has a fifty-two week low of $197.14 and a fifty-two week high of $293.06.

Lowe’s Companies (NYSE:LOW – Get Free Report) last issued its quarterly earnings results on Wednesday, August 19th. The home improvement retailer reported $4.40 earnings per share (EPS) for the quarter, beating the consensus estimate of $4.22 by $0.18. Lowe’s Companies had a negative return on equity of 75.67% and a net margin of 7.34%.The company had revenue of $25.96 billion for the quarter, compared to analyst estimates of $26.13 billion. During the same quarter last year, the company posted $4.33 EPS. The company’s revenue for the quarter was up 8.3% compared to the same quarter last year. Lowe’s Companies has set its FY 2026 guidance at 12.250-12.250 EPS. As a group, sell-side analysts expect that Lowe’s Companies, Inc. will post 12.26 earnings per share for the current year.

Lowe’s Companies Dividend Announcement The firm also recently announced a quarterly dividend, which will be paid on Wednesday, November 4th. Shareholders of record on Wednesday, October 21st will be paid a dividend of $1.25 per share. The ex-dividend date of this dividend is Wednesday, October 21st. This represents a $5.00 annualized dividend and a yield of 2.5%. Lowe’s Companies’s payout ratio is presently 42.27%.

Lowe’s Companies Company Profile (Free Report)

Lowe’s Companies, Inc is a home improvement retailer that serves homeowners, renters, and professional contractors primarily through stores and digital platforms in the United States. The company sells a broad selection of products for maintenance, repair, remodeling, and construction projects.

Its merchandise includes appliances, tools, hardware, lumber, building materials, plumbing and electrical supplies, paint, flooring, lighting, kitchen and bathroom products, outdoor living items, lawn and garden products, and seasonal goods.

Featured Articles Five stocks we like better than Lowe’s Companies Qualcomm’s Data Center Bet Looks More Real After Amazon’s AI Deal GE Aerospace’s $11.75B Deal Puts Howmet Aerospace in Focus Casey’s Post-Earnings Drop May Give Investors a Better Entry Into a Quality Retailer Sovereign AI: Palantir and Nebius Cut the Cloud Cord Want to see what other hedge funds are holding LOW? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Lowe’s Companies, Inc. (NYSE:LOW – Free Report).

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Lowe's (LOW - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.

Shares of this home improvement retailer have returned -6.6% over the past month versus the Zacks S&P 500 composite's -0.4% change. The Zacks Retail - Home Furnishings industry, to which Lowe's belongs, has lost 9.2% over this period. Now the key question is: Where could the stock be headed in the near term?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For the current quarter, Lowe's is expected to post earnings of $2.90 per share, indicating a change of -5.2% from the year-ago quarter. The Zacks Consensus Estimate has changed -7.1% over the last 30 days.

For the current fiscal year, the consensus earnings estimate of $12.28 points to a change of -0.1% from the prior year. Over the last 30 days, this estimate has changed -1.6%.

For the next fiscal year, the consensus earnings estimate of $13.04 indicates a change of +6.2% from what Lowe's is expected to report a year ago. Over the past month, the estimate has changed -2.9%.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Lowe's is rated Zacks Rank #4 (Sell).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

For Lowe's, the consensus sales estimate for the current quarter of $22.42 billion indicates a year-over-year change of +7.7%. For the current and next fiscal years, $92.03 billion and $94.44 billion estimates indicate +6.7% and +2.6% changes, respectively.

Last Reported Results and Surprise HistoryLowe's reported revenues of $25.96 billion in the last reported quarter, representing a year-over-year change of +8.3%. EPS of $4.4 for the same period compares with $4.33 a year ago.

Compared to the Zacks Consensus Estimate of $26.13 billion, the reported revenues represent a surprise of -0.68%. The EPS surprise was +4.27%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates two times over this period.

ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Lowe's is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Lowe's. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term.

California State Teachers Retirement System lifted its position in Lowe’s Companies, Inc. (NYSE:LOW – Free Report) by 21,712.9% during the 2nd quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission (SEC). The institutional investor owned 182,933,056 shares of the home improvement retailer’s stock after acquiring an additional 182,094,408 shares during the period. California State Teachers Retirement System owned about 32.63% of Lowe’s Companies worth $40,334,910,000 as of its most recent SEC filing.

Other hedge funds have also made changes to their positions in the company. Providence Wealth Advisors LLC raised its stake in Lowe’s Companies by 0.5% during the 4th quarter. Providence Wealth Advisors LLC now owns 7,969 shares of the home improvement retailer’s stock valued at $1,959,000 after purchasing an additional 36 shares during the period. First Command Advisory Services Inc. boosted its position in shares of Lowe’s Companies by 1.3% in the fourth quarter. First Command Advisory Services Inc. now owns 2,947 shares of the home improvement retailer’s stock worth $711,000 after buying an additional 38 shares during the period. Smithbridge Asset Management Inc. DE boosted its position in shares of Lowe’s Companies by 1.1% in the fourth quarter. Smithbridge Asset Management Inc. DE now owns 3,723 shares of the home improvement retailer’s stock worth $898,000 after buying an additional 39 shares during the period. Sumitomo Life Insurance Co. grew its holdings in shares of Lowe’s Companies by 0.6% during the fourth quarter. Sumitomo Life Insurance Co. now owns 6,140 shares of the home improvement retailer’s stock valued at $1,481,000 after buying an additional 39 shares in the last quarter. Finally, S&CO Inc. grew its holdings in shares of Lowe’s Companies by 0.6% during the fourth quarter. S&CO Inc. now owns 6,403 shares of the home improvement retailer’s stock valued at $1,544,000 after buying an additional 40 shares in the last quarter. Hedge funds and other institutional investors own 74.06% of the company’s stock.

Insider Activity at Lowe’s Companies In related news, EVP Janice Dupré sold 14,150 shares of Lowe’s Companies stock in a transaction on Tuesday, June 16th. The shares were sold at an average price of $221.90, for a total value of $3,139,885.00. Following the transaction, the executive vice president owned 39,785 shares in the company, valued at $8,828,291.50. This trade represents a 26.24% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this link. Also, EVP Margrethe Vagell sold 2,500 shares of Lowe’s Companies stock in a transaction on Thursday, June 18th. The stock was sold at an average price of $223.83, for a total transaction of $559,575.00. Following the completion of the transaction, the executive vice president owned 20,220 shares in the company, valued at $4,525,842.60. This trade represents a 11.00% decrease in their position. The SEC filing for this sale provides additional information. In the last three months, insiders have sold 25,980 shares of company stock worth $5,796,937. 0.29% of the stock is owned by insiders.

Lowe’s Companies Stock Performance LOW opened at $204.45 on Monday. The firm has a market cap of $114.71 billion, a P/E ratio of 17.28, a price-to-earnings-growth ratio of 2.72 and a beta of 0.85. The business has a 50 day moving average price of $213.44 and a 200 day moving average price of $227.51. Lowe’s Companies, Inc. has a twelve month low of $199.34 and a twelve month high of $293.06. Lowe’s Companies (NYSE:LOW – Get Free Report) last announced its quarterly earnings results on Wednesday, August 19th. The home improvement retailer reported $4.40 EPS for the quarter, beating the consensus estimate of $4.22 by $0.18. Lowe’s Companies had a negative return on equity of 75.67% and a net margin of 7.34%.The company had revenue of $25.96 billion for the quarter, compared to the consensus estimate of $26.13 billion. During the same quarter last year, the company posted $4.33 earnings per share. The company’s revenue for the quarter was up 8.3% compared to the same quarter last year. Lowe’s Companies has set its FY 2026 guidance at 12.250-12.250 EPS. As a group, analysts anticipate that Lowe’s Companies, Inc. will post 12.26 earnings per share for the current fiscal year.

Lowe’s Companies Announces Dividend The company also recently announced a quarterly dividend, which will be paid on Wednesday, November 4th. Investors of record on Wednesday, October 21st will be paid a $1.25 dividend. The ex-dividend date is Wednesday, October 21st. This represents a $5.00 dividend on an annualized basis and a yield of 2.4%. Lowe’s Companies’s dividend payout ratio (DPR) is presently 42.27%.

Wall Street Analyst Weigh In Several brokerages recently issued reports on LOW. Stifel Nicolaus reduced their price objective on Lowe’s Companies from $270.00 to $220.00 and set a “hold” rating for the company in a research note on Monday, May 18th. Oppenheimer lowered their target price on Lowe’s Companies from $315.00 to $275.00 and set an “outperform” rating on the stock in a research note on Monday, May 18th. The Goldman Sachs Group dropped their target price on Lowe’s Companies from $300.00 to $293.00 and set a “buy” rating on the stock in a report on Thursday, May 21st. Jefferies Financial Group reduced their price target on shares of Lowe’s Companies from $305.00 to $278.00 and set a “buy” rating for the company in a research report on Thursday, May 21st. Finally, Truist Financial decreased their price target on shares of Lowe’s Companies from $255.00 to $254.00 and set a “buy” rating for the company in a report on Thursday, August 20th. Twenty-three investment analysts have rated the stock with a Buy rating, eleven have assigned a Hold rating and two have issued a Sell rating to the stock. According to MarketBeat.com, the stock presently has a consensus rating of “Moderate Buy” and an average target price of $258.53.

View Our Latest Report on Lowe’s Companies

Key Lowe’s Companies News Here are the key news stories impacting Lowe’s Companies this week:

Positive Sentiment: Retail earnings point to a “K-shaped” consumer economy, with Lowe’s and Home Depot benefiting from relatively solid home-improvement sales even as lower-income-focused retailers face greater tariff and margin pressure. Retail Earnings Just Exposed a Bigger Divide in the U.S. Consumer Economy Positive Sentiment: Lowe’s plans to open three additional stores in 2026, supporting its long-term sales footprint and market expansion. Lowe’s opening 3 more stores in these states in 2026 Positive Sentiment: The Lowe’s Foundation launched a large skilled-trades training coalition with NVIDIA, AT&T, Bank of America, Carrier, General Motors, DEWALT and Duke Energy. The effort could expand the contractor labor pool and support future Pro customer demand. Nvidia Is Now Paying to Train Plumbers Neutral Sentiment: Five new executive vice presidents were appointed across Pro, Home Services, stores, information and AI, strategy, and marketing. Lowe’s also maintained its $1.25 quarterly dividend, while expanding online offerings; the new leadership could improve execution, but a shelf registration for 2.5 million shares creates a potential future dilution overhang. Did Lowe’s New EVP Lineup and Shelf Filing Just Quietly Reframe the LOW Investment Narrative? Neutral Sentiment: The NFL-focused “Earn Your Sunday” campaign adds new star athletes and may strengthen brand engagement, although its direct financial impact is unclear. Lowe’s Kicks Off Year Two of Earn Your Sunday Negative Sentiment: Zacks Research cut its FY2027 EPS estimate for Lowe’s to $12.25 from $12.45, aligning it near the $12.26 consensus and signaling limited expected earnings growth. Zacks Research Issues Negative Estimate for LOW Earnings Negative Sentiment: Mortgage rates have reached a one-year high following a global bond sell-off. Higher borrowing costs could discourage housing transactions and large remodeling projects, pressuring demand at Lowe’s and Home Depot. Mortgage Rates Just Hit a 1-Year High Lowe’s Companies Company Profile (Free Report)

Lowe’s Companies, Inc is a leading home improvement retailer that operates large-format stores and digital channels serving both do-it-yourself homeowners and professional contractors. The company offers a broad assortment of products including building materials, lumber, appliances, tools and hardware, plumbing and electrical supplies, paint, flooring, kitchen and bath fixtures, outdoor and garden products, and home decor. Lowe’s also provides a range of services such as installation, home improvement financing, tool and equipment rental, and contractor-focused sales programs.

Operations are centered on a nationwide brick-and-mortar store network supported by distribution centers and an e-commerce platform that enables online ordering, delivery and in-store pickup.

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Lowe's has increased its dividend for 64 consecutive years. Incredible. It's one of the longest dividend growth streaks in the world. Lowe's has a good financial position. Because of negative common equity from extensive buybacks, there is no long-term debt/equity ratio. The P/E ratio has dropped to 16.9. That's as low as I've seen it over the last 10 years.

Home sales are so slow owners are sprucing up their properties instead. Renters and the wealthy are doing the redecorating.

Mortgage rates recently hit a one-year high, with the 30-year fixed-rate mortgage rate now at 6.71%.

The global sell-off in Treasury bonds is driving the increase because, as bond prices fall, bond yields rise. Mortgage rates are directly correlated to moves in the yield on the 10-year U.S. Treasury note.

Bond yields have surged recently, as inflation remains persistently high, the Iran war continues on, and as investors grow more nervous about mounting U.S. debt, which recently topped $40 trillion.

Bond yields directly impact all stocks, but some sectors are more impacted than others. Two examples are Lowe's and Home Depot (HD +0.60%).

Image source: Getty Images.

Directly tied to the housing marketWhile Lowe's and Home Depot don't issue mortgages, they do sell materials, tools, and appliances used by consumers, builders, and other professionals who work on and inside homes and other structures. So, the health of the housing market can certainly impact their businesses.

In fact, on its recent earnings call for the second quarter of 2026, Lowe's was forced to lower its full-year outlook. The company now expects sales of $92 billion versus a prior range of $92 billion to $94 billion.

The company also lowered its operating margin guidance to 11.2% versus a prior range of 11.2% to 11.4%, and similarly lowered its adjusted operating margin guidance to 11.6% from a previous range of 11.6% to 11.8%.

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Diluted earnings per share are now forecasted at $11.75, versus a prior range of $11.75 to $12.25.

"Across retail home improvement, macro pressure like interest rates, inflation and gas prices continue to influence DIY (do it yourself) demand," Lowe's CFO Brandon Sink said on the company's most recent earnings call.

Home Depot reaffirmed its full-year outlook in its second-quarter earnings report, but management also noted pressure in the housing market, stemming from high interest rates and high housing costs.

Specifically, CFO Richard McPhail said that housing turnover has been at historic lows for the past four years.

This is likely due to a combination of affordability issues and people who managed to purchase homes at historically low interest rates during the pandemic not wanting to relinquish those rates.

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Marginally higher interest rates won't affect the company too much, but that's because Home Depot has been dealing with these conditions for years now.

Interestingly, in the second quarter, Home Depot managed to grow revenue by 5.7% year over year, while earnings increased by 4.6%.

Home Depot has maintained momentum by focusing on contractors and smaller repair projects for more price-conscious customers.

Lower rates would lift both stocksWith mortgage rates soaring, it's more difficult for players like Lowe's and Home Depot to do business because building materials cost more, and the high price of housing reduces homebuilding and home improvement projects.

The good news for value investors is that both stocks trade at forward earnings multiples below their typical levels over the past two years.

LOW PE Ratio (Forward) data by YCharts

So, if and when interest rates do decline, that should lift both stocks. Now, predicting the future trajectory of the bond market and mortgage rates is no easy task, but things can also change quickly.

Look how many times the outlook for interest rates has changed this year. Both Lowe's and Home Depot are stocks that can benefit from lower rates, whenever they might materialize.

They both also have solid dividend yields. Lowe's has a trailing 12-month yield of nearly 2.4%, while Home Depot is roughly 2.9%.

Home Depot and Lowe's both just paid shareholders, but the headline yield on one of them masks a coverage story that points in a very uncomfortable direction for income investors counting on future raises.

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Home improvement’s dividend heavyweights just wrote checks to shareholders, and the scorecards tell very different stories. Home Depot (NYSE:HD | HD Price Prediction) offers the fatter yield and the bigger absolute payout, while Lowe’s (NYSE:LOW) counters with a longer growth streak, a leaner payout ratio, and free cash flow that towers over its distribution. With both stocks trading well off last year’s highs, the dividend math matters more than usual.

Home Depot’s Latest Payment: Higher Yield, Slower Raise Home Depot’s board declared a $2.33 quarterly dividend on August 20, 2026, with an ex-dividend date of September 3, 2026 and a payment date of September 17, 2026. That matches the prior two quarters and works out to an annualized rate of $9.32 per share.

The reset earlier this year lifted the payout from $2.30 to $2.33, a roughly 1.3% bump that ranks as one of Home Depot’s most restrained raises in years. For context, the quarterly amount stood at $1.65 as recently as 2021 and $1.03 in 2018.

At a recent price of $319.64, the yield sits around 2.87%, comfortably above Lowe’s. Home Depot has now paid a cash dividend for its 156th consecutive quarter, nearly 39 years without interruption. Coverage is adequate but not luxurious: the $9.32 annualized payout consumes roughly 63% of fiscal 2025 adjusted EPS of $14.69, and management guided fiscal 2026 EPS to approximately flat to 4% growth versus fiscal 2025.

Lowe’s Latest Payment: Smaller Check, Bigger Raise Lowe’s went the other way. The company paid $1.25 per share on August 5, 2026, up from $1.20 the prior quarter. That is a full 4% hike, more than triple Home Depot’s percentage raise, and it pushes the annualized forward dividend to $5.00.

On the Q2 earnings call, CFO commentary framed the payment as reinforcing Lowe’s “commitment to returning capital to shareholders and our status as a dividend aristocrat.” The company has raised its payout for more than 60 straight years, putting it in the rarefied Dividend King club that Home Depot cannot claim.

At $201.37, the yield lands near 2.35%. That is thinner than Home Depot’s on the surface, but the coverage picture is meaningfully stronger. Lowe’s fiscal 2026 adjusted EPS guidance of approximately $12.25 implies a payout ratio near 41%, well below Home Depot’s 63%.

Free Cash Flow: Where Lowe’s Pulls Away Cash generation widens the gap further. Lowe’s produced $3.1 billion in free cash flow in Q2 alone against $673 million in dividends paid, a coverage ratio north of four times. For the trailing fiscal year, operating cash flow reached $9.86 billion against dividend payouts of $2.64 billion.

Home Depot’s dividend bill is larger in absolute terms. Management disclosed approximately $2.3 billion in dividends paid during Q2 alone, alongside $880 million in capital expenditures. Return on invested capital slipped to 24.8% from 27.2% a year earlier, while Lowe’s posted 25.5% ROIC and management targeted 2.75 times adjusted debt-to-EBITDA by mid-2027.

Scorecard Verdict Both stocks have been punished by the housing slowdown. Home Depot is down 19.28% over the past year, and Lowe’s has slid 20.9%. Home Depot trades near 22 times earnings, while Lowe’s sits closer to 17 times, giving income investors a cheaper entry point on the smaller check.

Home Depot wins on yield and payment longevity. Lowe’s wins on growth streak, dividend growth rate this cycle, payout ratio, free cash flow coverage, and valuation. Grading strictly on the dividend itself, Lowe’s earns the higher scorecard mark. Investors who prioritize current income today may still prefer Home Depot’s 2.87% yield, but the safer, faster-growing payout, the one better positioned to keep compounding through the housing cycle, belongs to Lowe’s.

Contact [email protected] for any questions or corrections.

Key Takeaways Lowe's lowered fiscal 2026 sales, comparable-sales, margin and adjusted EPS expectations.Online sales rose 15.7%, while Pro and Home Services helped drive a fifth straight quarter of comp gains.Gross margin fell 80 basis points as acquisitions, fuel, transportation and pricing pressures weighed. Lowe's Companies, Inc. (LOW - Free Report) paired a second-quarter earnings beat with a reset of its fiscal 2026 outlook. The result puts more weight on whether Pro, Online and Home Services can keep offsetting weak discretionary DIY demand.

Those growth engines remain active, but housing pressure, softer transactions and margin headwinds are shaping the second-half earnings picture. The revised outlook makes near-term execution more important even as Lowe's continues investing in its Total Home strategy.

Lowe's Q2 Beat Masks a Softer Sales BackdropAdjusted earnings reached $4.40 per share, up 1.6% year over year and above the Zacks Consensus Estimate of $4.22. Revenues increased 8.3% to $25,956 million but missed the consensus mark of $26,135 million.

Comparable sales rose just 0.2%. A 2.3% increase in average ticket offset a 2.1% decline in comparable transactions, showing that positive sales growth depended more on ticket growth than customer traffic.

Image Source: Zacks Investment Research

DIY Weakness Pulls Lowe's Guidance LowerLowe's now expects fiscal 2026 sales of about $92 billion, flat comparable sales, an adjusted operating margin of approximately 11.6% and adjusted earnings of about $12.25 per share. Each measure moved to the bottom of the prior guidance range.

Management also expects third-quarter adjusted earnings per share to be approximately 7% below the prior-year level. The reset reflects first-half results as well as current consumer demand and housing trends, keeping the near-term earnings setup restrained.

Pro and Online Keep Lowe's Growth Mix IntactPro, Online and Home Services helped Lowe's post a fifth consecutive quarter of positive comparable sales. Online sales increased 15.7%, while Pro and Home Services again contributed growth despite softer discretionary DIY spending.

The Home Depot, Inc. (HD - Free Report) reported a 1.7% comparable-sales increase in its second quarter of fiscal 2026 and reaffirmed its full-year guidance. Its management also said customers continued to engage in smaller projects, showing that cautious project spending extends across home improvement.

Acquisitions Add Scale but Also Near-Term Drag for LOWFoundation Building Materials and Artisan Design Group extend Lowe's reach into distribution, construction and installation. Yet residential construction pressure is holding back the near-term contribution, with ADG fully exposed to that market and about 45% of FBM exposed.

Builders FirstSource, Inc. (BLDR - Free Report) reported an 8.8% second-quarter sales decline, primarily because of lower housing starts and related headwinds. That backdrop helps frame the pressure facing construction-linked demand as Lowe's integrates FBM and ADG.

Margins Face Fuel, Freight, and Promo Pressure at Lowe'sSecond-quarter gross margin was 33.0%, down 80 basis points from the prior-year adjusted rate, including dilution from FBM and ADG. An approximately $80 million tariff-refund benefit added about 30 basis points but was largely offset by elevated fuel and transportation costs.

Competitive pricing added another risk late in the quarter. Management said rivals used tariff refunds to lower prices in seasonal categories, affecting Lowe's July performance, while the company chose not to match promotions that fell outside its financial plan.

LOW's Near-Term Signal Stays CautiousLowe's growth platforms continue to advance, but the revised outlook leaves macro pressure and profitability as the more immediate earnings issues. The next phase depends on sustaining Pro, digital and services momentum while DIY and housing demand remain soft.

LOW currently carries a Zacks Rank #4 (Sell), which points to an unfavorable near-term earnings-estimate trend. Its VGM Score of B, Growth Score of B and Momentum Score of B show comparatively favorable characteristics in those styles, while its Value Score of C is less favorable. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks Style Scores are designed to complement the Zacks Rank rather than override it. The current combination therefore keeps the short-term signal cautious even though several underlying style characteristics remain supportive.