Lowe's (LOW) Stock Forecast & Price Target

Lowe's Companies demonstrated improved financial performance with total sales rising by 3.2% to $20.8 billion, alongside a modest comparable sales increase of 0.4%, indicating resilient demand within the home improvement sector. The company achieved a gross margin of 34.2%, up 50 basis points year-over-year, attributed to improved inventory management, reduced losses in the credit program, and favorable product mix shifts, particularly in its pro segment. Moreover, the expansion into the professional business segment and the launch of a home improvement-focused marketplace are strategic initiatives that are expected to enhance revenue streams and bolster market share going forward.

The analysis indicates a negative outlook for Lowe's Companies, driven by a projected slowdown in sales growth due to potential economic factors, including rising interest rates and a shift in consumer spending away from home improvement activities. Lower operating margins from acquired businesses, coupled with decreases in employment trends that are correlated with retail sales, are expected to negatively impact overall profitability, resulting in decreased earnings per share (EPS) estimates for 2025 and 2026. Additionally, inventory reductions, while initially beneficial, may face pressure from higher tariff costs, potentially exacerbating the margin contraction and further impeding financial performance.