Lowe's (LOW) Stock Forecast & Price Target

Lowe's Companies, the second-largest home improvement retailer globally, reported a total sales increase of 3.2% to $20.8 billion, with comparable store sales rising by 0.4%, signaling steady demand amid a competitive landscape. The firm demonstrated improved operational efficiency, with gross margins expanding by 50 basis points year-over-year to 34.2%, attributed to better inventory sell-through and reduced credit program losses. Additionally, significant growth in the professional client sector and advancements in online sales through enhanced digital platforms suggest a robust strategy for future revenue generation and market share expansion.

Lowe's Companies reported a significant year-over-year decline in inventory, down $400 million to $17.2 billion, driven by AI-driven productivity solutions and SKU reductions, but higher tariff costs may pose future pressures. The company's operating margins are expected to contract by a total of 50 basis points over the next two years due to the lower margins associated with recent acquisitions and potential sales declines linked to rising interest rates. Additionally, downward revisions to 2025 and 2026 EPS estimates highlight concerns over slower sales growth and employment trends, which are negatively correlated to retail sales performance.