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what it is
Lowe’s sells the stuff you need when your house breaks, leaks, ages, or becomes your weekend project.
how it gets paid
Last year S Cos made $83.7B in revenue. Lumber + building materials + millwork + plumbing/electrical was the main engine at $21.7B, or 26% of sales.
why growth slowed
Revenue fell 3.1% last year. The 33.8% gross margin mattered most because it shows Lowe’s protected merchandise profit even while annual revenue fell 3.1% to $83.7B.
what just happened
Lowe’s last reported $1.98 in EPS, ahead of the $1.94 estimate by 2.06%.
At a glance
A+ balance sheet — rock-solid finances — built to survive anything
80/100 earnings predictability — you can trust these numbers
20.9x trailing p/e — priced about right
2.0% dividend yield — cash in your pocket every quarter
35.0% return on capital — every dollar works hard here
xvary composite: 76/100 — average
What they do
Lowe’s sells the stuff you need when your house breaks, leaks, ages, or becomes your weekend project.
Amazon can ship a screwdriver. Lowe’s has 1,759 stores and 195.8 million square feet near your house. When your water heater dies on Tuesday, proximity becomes pricing power (pricing power → the ability to hold margins because you are convenient → so what, Lowe’s still runs a 15.5% operating margin on $83.7B of annual revenue).
How they make money
$83.7B
annual revenue · their business grew -3.1% last year
Outdoor living + lawn & garden
$20.4B
Appliances + kitchens & bath
$19.1B
Tools + hardware + paint
$17.2B
Lumber + building materials + millwork + plumbing/electrical
$21.7B
Flooring + home fashions + storage/cleaning
$12.0B
The products that matter
repair and remodel retail
Home Improvement Retail
$83.7B annual revenue
it's the full $83.7B business. if homeowners repair, paint, replace, or remodel, Lowe's gets paid.
core business
contractor-focused growth push
Pro customer expansion
28.0% return on capital
management is leaning harder into professional buyers because that demand holds up better when weekend DIY projects slow. the recent foundation building materials purchase points in that direction.
steadier demand
capital return layer
Dividend and share support
2.0% yield
this is not a high-yield story, but you do get paid while you wait. that matters more when the stock is tied to a slow housing cycle.
shareholder return
Key numbers
35.0%
return on capital
Return on capital (profit earned on money invested in the business → how hard each dollar works → so what, Lowe’s turns a slow-growth retail model into a 35.0% machine).
15.5%
operating margin
Operating margin (profit after running the business, before interest and taxes → the core engine → so what, Lowe’s keeps 15.5 cents from each sales dollar before financing costs).
$37.5B
long-term debt
Long-term debt (borrowed money due over years → fixed bills that keep showing up → so what, it equals 21% of capital and trims flexibility if housing stays weak).
20.9x
trailing p/e
Trailing P/E (stock price divided by last 12 months of earnings → how much you pay for current profit → so what, you are not buying Lowe’s at a bargain price).
Financial health
A+
strength
- balance sheet grade A+ — near the highest rating possible
- risk rank 2 — safer than 80% of stocks
- price stability 85 / 100
- long-term debt $37.5B (21% of capital)
- net profit margin 9.0% — keeps 9 cents of every dollar in revenue
A+ — among the top-rated companies for balance sheet quality.
Total return vs. market
You invested $10,000 in LOW 3 years ago → it's now worth $13,980.
The index would have given you $14,540.
source: institutional data · total return
What just happened
beat estimates
Lowe’s last reported $1.98 in EPS, ahead of the $1.94 estimate by 2.06%.
That beat was small, but it matters because the company is managing through a weak housing backdrop. Gross margin stayed at 33.8%, which tells you the business still has pricing discipline.
$20.6B
revenue
$1.98
eps
33.8%
gross margin
the number that mattered
The 33.8% gross margin mattered most because it shows Lowe’s protected merchandise profit even while annual revenue fell 3.1% to $83.7B.
-
lowe’s should perform well in a challenging market.
-
high mortgage rates are a hindrance to the housing sector.
-
home turnover is a factor affecting the company’s sales and earnings momentum.too, elevated prices for goods and services have made consumers cautious about taking on big home-improvement projects.
-
this situation may persist for a few quarters.lowe’s has heightened its focus on the professional customer category, of which stable demand is a notable characteristic.
-
the recent purchase of foundation building materials was an important move in this direction.
source: company earnings report, 2026
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What could go wrong
the #1 risk for Lowe's is frozen existing-home turnover under near-7% mortgages.
med
housing stays stuck
if mortgage rates stay near 7%, fewer people move. that slows the bigger repair and remodel projects that usually follow a home sale.
this pressure sits over the full $83.7B revenue base. Lowe's is diversified by product, not by end demand.
med
sales hold, profits do not
last quarter already showed the problem: revenue rose 3% to $20.8B while EPS fell 4% to $2.88. costs and mix matter more when demand is only okay.
with a 7.8% net margin, Lowe's does not need much pressure before earnings growth disappears.
med
the pro-customer pivot underdelivers
management is pushing deeper into professional demand, including the foundation building materials deal. that strategy needs to produce steadier profit, not just a new slide in the deck.
at $144B market cap and 20.9x trailing earnings, the stock still assumes Lowe's turns quality into growth.
if turnover stays weak and the pro push fails to offset it, 20.9x earnings looks full for a business with 7.8% margins.
source: institutional data · regulatory filings · risk analysis
Pay attention to
margin
profit is trailing sales
revenue rose 3% last quarter. EPS fell 4%. until that flips, the stock is waiting on operating leverage, not just demand.
housing
mortgage rates near 7%
Lowe's biggest outside variable is existing-home turnover. if rates stay high, the bigger remodel cycle stays muted.
earnings
next report needs more than stable revenue
you want to see whether earnings stop shrinking. another quarter of positive sales and negative EPS is not the setup the multiple wants.
strategy
professional customer mix
the foundation building materials deal matters because pro demand is supposed to be steadier. if that mix improves, Lowe's cycle gets less fragile.
Analyst rankings
short-term outlook
average
outlook rank 3 — in human-speak, analysts see a stock acting like the market until housing demand improves.
risk profile
above average
risk rank 2 — safer than roughly 80% of stocks. you are buying quality, even if the cycle is slow.
chart momentum
average
momentum rank 3 — no strong technical message here. the stock needs fundamentals to do the work.
earnings predictability
80 / 100
management usually delivers a narrow outcome range. that is useful when you are underwriting a cyclical retailer.
source: institutional data
Institutional activity
institutions have been net buying for 2 consecutive quarters — 1,010 buyers vs. 1,007 sellers in 4q2025. total institutional holdings: 0.4B shares. net buying for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$213
$373
$257
current price
$293
target midpoint · +14% from current · 3-5yr high: $420 (+65% · 14% ann'l return)
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