Key Stats for Lowe’s Stock
- Current Price: ~$221 (May 20, 2026)
- Q1 FY2026 Revenue: $23.1B, +10.3% YoY
- Q1 FY2026 Adjusted Diluted EPS: $3.03, +3.8% YoY
- Q1 FY2026 Comparable Sales: +0.6%
- FY2026 Revenue Guidance: $92B to $94B
- FY2026 Adjusted Diluted EPS Guidance: ~$12.25 to $12.75
- TIKR Model Price Target: $346 (mid case)
- Implied Upside: ~57%
Lowe’s Posts $23.1B in Q1 2027 Revenue but Gross Margin Slips on Acquisition Dilution
Lowe’s (LOW) posted Q1 revenue of $23.1B, up 10.3% from the prior year, with comparable sales rising 0.6% and adjusted diluted EPS of $3.03, up from $2.92 a year ago.
The comparable sales gain was uneven across the quarter.
According to Brandon Sink, Executive Vice President and CFO on the Q1 earnings call, February comps were down 1.4% as winter storms moved through much of the country, before accelerating to 2.1% in March and settling at 0.5% in April as spring demand arrived.
The quarter’s positive comp was driven by spring seasonal categories, Pro, appliances, online, and home services.
Online sales were a standout, growing 15.5% in the quarter, supported by enhancements to fulfillment and same-day delivery options, according to Marvin Ellison, Chairman and CEO on the Q1 earnings call.
Pro remained a consistent area of strength, with Ellison noting the small to medium Pro customer has stayed resilient in the current macro environment and that Pro is expected to continue outperforming DIY through the balance of the year.
Gross margin came in at 32.7%, down 70 basis points versus the prior year, according to Sink, driven primarily by the dilutive impact of the FBM and ADG acquisitions, partially offset by favorability in credit revenue.
Adjusted operating margin was 11.5%, down 43 basis points, in line with company expectations.
Free cash flow for the quarter was $2.8B, according to Sink, with $674M returned to shareholders via dividends and $2.4B deployed to repay bond maturities as Lowe’s works toward a target leverage ratio of 2.75x by mid-2027.
For full-year FY2026, Lowe’s affirmed guidance for revenue of $92B to $94B, comparable sales of flat to up 2%, and adjusted diluted EPS of approximately $12.25 to $12.75.
For Q2, Sink guided for comp sales roughly in line with the midpoint of the full-year range and flagged adjusted operating margin pressure from acquisition impacts, seasonal investment spending, and near-term transportation cost headwinds.
Lowe’s Revenue Grows 10% but Gross Margin Gives Back Ground to the Acquisitions
The Q1 income statement shows an operating margin recovery taking hold, but still running below prior spring peaks.
Revenue expanded from $20.59B in the January 2026 quarter to $23.08B in the May 2026 quarter, a 10.3% increase that reflects both organic growth and the contribution from recent acquisitions.
Gross margin compressed from 34.2% in the October 2025 quarter to 32.5% in January 2026, then held at 32.7% in Q1, a slight sequential improvement but still 70 basis points below the 33.4% posted in the comparable quarter a year prior.
Operating income was $2.55B in Q1, up 2.4% YoY, recovering from $1.76B in the January 2026 quarter but below the $3.47B posted in the August 2025 quarter when seasonality was at its most favorable.
Operating margin came in at 11.1% for the May 2026 quarter, compared to 8.6% in January 2026 and 14.5% in the August 2025 seasonal peak.
According to Sink, the gross margin dilution in Q1 was driven by the FBM and ADG acquisitions, which Lowe’s expects to begin anniversarying in the second half of 2026, reducing that drag on reported margins.
SG&A as a percentage of sales improved 17 basis points YoY, according to Sink, reflecting continued cost discipline and the accretive SG&A profile of the acquired businesses.
TIKR’s $346 Target on Lowe’s Stock Assumes Margins Do What Acquisitions Currently Prevent
TIKR’s mid-case model values Lowe’s stock at $346, implying 57% upside from the current price of ~$221, based on a realization horizon extending to December of 2031, with an annualized return of 10% per year.
The mid-case model assumes a revenue CAGR of 3.8% and a net income margin of 8.2%, a meaningful step up from the 8.1% net income margin reported over the trailing one year.
Embedded in that mid-case is a P/E compression assumption of negative 2.2% per year, meaning the model does not require multiple expansion to deliver the target return: earnings growth alone carries the return, with the multiple declining modestly over the forecast window.
With Lowe’s affirming full-year guidance and Pro and online continuing to gain share in a flat market, the Q1 print does not weaken the model’s inputs.
The low case yields $402 at a 7.1% IRR; the high case reaches $614 at a 12.4% IRR, with the spread hinging primarily on whether revenue growth sustains toward 4.2% and net margins reach 8.5%.
The real question this print raises: can Lowe’s expand operating margins in the back half while absorbing transportation cost pressure, acquisition dilution, and a DIY customer that remains broadly soft.
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