Key Stats for Lowe’s Stock
- 52-Week Range: $203 to $293
- Current Price: $211
- Street Mean Target: $264
- Street High Target: $300
- Analyst Consensus: 19 Buy, 5 Outperform, 10 Hold, 1 Underperform
- TIKR Model Target (Jun. 2031): $312
Lowe’s Beats Q1 Estimates Four Quarters Running, but the Market Sold the Stock Anyway
Lowe’s Companies (LOW), the second-largest home improvement retailer in the United States, posted fiscal Q1 revenue of $23.08 billion following its May 20 earnings call, beating the $22.97 billion consensus and growing 10.3% year over year.
Adjusted diluted EPS came in at $3.03, above the $2.97 estimate and up 3.8% from the prior year.
Comparable sales rose 0.6%, extending what is now four consecutive quarters of positive comps in the toughest housing market Lowe’s has faced since the financial crisis.
Online sales grew 15.5%, with the company’s AI-powered shopping assistant Mylow now handling over one million customer inquiries per month and generating triple the conversion rate of shoppers who bypass the tool.
The quarter had a 30-basis-point drag early from February winter storms across much of the country, meaning the underlying business outperformed on a weather-adjusted basis.
Despite that, Lowe’s stock fell around 3% on earnings day as the market read the reaffirmed full-year guidance — total sales of $92 billion to $94 billion and adjusted EPS of $12.25 to $12.75 — as evidence of limited near-term upside.
CEO Marvin Ellison did not dispute the housing backdrop and stated in Q1 2026 earnings call: “We are operating in a K-shaped economy where the higher-income consumers are spending on home upgrades, while the lower-income consumers are a little bit more cautious and uncertain.”
The Pro segment again led the business, with particular strength in rough plumbing, electrical, HVAC, and water heaters, while the company raised its quarterly dividend to $1.25 per share, a 4% increase.
Lowe’s also advanced integration of its two strategic acquisitions, Foundation Building Materials (FBM) and Artisan Design Group (ADG), which add exposure to residential and commercial new construction and are tracking toward cost synergy targets in procurement categories including drywall, steel, and insulation.
Adjusted debt to EBITDAR stood at 3.1x at quarter-end, with management committed to returning to a 2.75x leverage ratio by mid-2027.
LOW Analysts Hold Buy Ratings Despite Target Cuts: What the EBITDA Trajectory Shows
Thirty-three analysts cover LOW with a mean price target of around $264 which is roughly 25% above current levels and the distribution skews bullish: 19 Buy ratings, 5 Outperforms, 10 Holds, and 1 Underperform as of early June.
Multiple firms cut targets after earnings: JP Morgan dropped its target to $279, Jefferies to $278, and TD Cowen to $235, among others, while none downgraded their buy-equivalent ratings.
That separation between target cuts and rating stability is the signal worth reading: analysts are trimming near-term numbers but not abandoning conviction on the medium-term setup.
Lowe’s stock’s EBITDA for Q1 came in at $3.22 billion, up 9.4% year over year and ahead of the $3.13 billion estimate by around $83 million.
Consensus now projects Q2 EBITDA of around $4.10 billion, roughly 3% above Q1 last year, followed by a ramp to around $3.28 billion in Q3 and acceleration to around $4.29 billion by the July 2027 quarter.
The forward EBITDA line is not flat: over the next four reported quarters, the trajectory runs from around $4.10 billion to around $4.29 billion, implying sustained mid-single-digit growth even with housing turnover stuck near historic lows.
Lowe’s stock’s free cash flow generation reinforces the picture: Q1 FCF of $2.83 billion came in essentially in line with the $2.83 billion estimate, and the company generated $674 million in dividends at $1.20 per share while repaying $2.4 billion in bond maturities.
The bear case is visible in the numbers too: EBITDA margins have compressed, running at 13.9% in Q1 versus 14.1% a year earlier, as FBM and ADG dilute the blended margin profile in the near term before cross-selling revenue synergies accumulate.
CFO Brandon Sink flagged building oil-price pressure on transportation and input costs in Q2, and acknowledged that around 20% of the available tax refund stimulus has been spent, with around $50 billion still to be distributed over the next three to four months.
Lowe’s stock is undervalued against the EBITDA trajectory the Street is projecting: the market is pricing a cyclical trough scenario onto a business that has already demonstrated four consecutive quarters of positive comps, with the Pro segment, online, and home services all growing.
Is Lowe’s Stock Undervalued in 2026? TIKR’s $312 Base Case and the Conditions That Unlock It
TIKR’s base case model puts Lowe’s Companies at a target price of around $312, implying around 48% total return from the current price over approximately 4.6 years, with an annualized IRR of around 9%.
The model anchors to mid-case assumptions reaching fruition by January 2031: revenue CAGR of around 3%, net income margins of around 8%, and EPS growth of around 4% per year.
The P/E multiple is assumed to contract modestly — around 3% per year in the base case — which means the model does not require a re-rating to justify the target, only execution against a modest growth trajectory.
The low case puts Lowe’s stock at around $282, representing a total return of around 34% over the same period with an annualized IRR of around 3%.
The high case reaches around $415, reflecting total return of around 97% and an annualized IRR of around 8%.
What has to go right for the base case: Revenue growing at around 3% annually, net income margins holding around 8%, and EPS compounding at around 4% — all achievable if Pro continues taking share, online sustains above-market growth, and the FBM/ADG acquisitions contribute as management projects as the housing cycle eventually normalizes.
What breaks the low case: Oil prices stay elevated into the back half of fiscal 2026, pressuring margins further than the current 13.9% EBITDA margin; housing turnover remains near historic lows through 2027; and the FBM/ADG margin dilution does not reverse on schedule.
What drives the high case: An acceleration in housing turnover unlocking the estimated $35 trillion in home equity (roughly $400,000 per household, with around one-third tappable) triggers a DIY recovery on top of the existing Pro momentum, and EBITDA margins recover faster than the base case models.
The market is currently pricing Lowe’s as if the housing freeze is permanent. The TIKR model prices it as a business with demonstrated share-gain capability, durable Pro demand, and a housing recovery option that costs nothing at current levels.
What is the price target for LOW stock?
The Street mean target is around $264 as of early June 2026, with the Street high target at $300. TIKR’s base case model puts fair value at around $312, implying around 48% total return from the current price of around $211 over approximately 4.6 years.
Is Lowe’s stock undervalued in 2026?
Based on TIKR’s base case, Lowe’s stock is undervalued at current levels.
The business has delivered four consecutive quarters of positive comparable sales, the Pro and online segments are growing, and the model requires only modest growth (around 3% revenue CAGR) to justify a price around 48% above where it trades now.
Should You Invest in Lowe’s Companies, Inc.?
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