Is Lowe's Stock Still a Buy After Earnings?
Lowe's stock is lower Tuesday after the retailer's Q2 revenue miss and downwardly revised outlook. Should investors be worried?


Lowe's (LOW) stock is struggling for direction Tuesday after the home improvement retailer reported second-quarter results that were mixed compared with analysts' expectations and slashed its full-year outlook.
In the three months ended August 2, Lowe's said its revenue decreased 5.6% year-over-year to $23.6 billion, pressured by a 5.1% decline in comparable-store sales, also known as same-store sales. Its earnings per share (EPS) were down 10.1% from the year-ago period to $4.10.
"The company delivered strong operating performance and improved customer service despite a challenging macroeconomic backdrop, especially for the homeowner," said Lowe's CEO Marvin Ellison in a statement. "At the same time, we continue to build momentum with our Total Home strategy reflected by our mid-single-digit positive comparisons with the Pro customer this quarter."

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results were mixed compared with what analysts were anticipating. Specifically, Wall Street targeted revenue of $23.9 billion and earnings of $3.97 per share for Lowe's Q2, according to Yahoo Finance.
Lowe's also updated its full-year outlook "based on lower-than-expected DIY sales and a pressured macroeconomic environment." Here's what it now expects for its fiscal year:
Metric | New outlook | Previous outlook |
---|---|---|
Revenue | $82.7 billion to $83.2 billion | $84 billion to $85 billion |
Comparable-store sales | (3.5%) to (4%) | (2%) to (3%) |
EPS | $11.70 to $11.90 | $12 to $12.30 |
"As we look ahead, we are confident that we are making the right long-term investments to take share when the market recovers," Ellison said.
Is Lowe's stock a buy, sell or hold?
Lowe's has lagged the broader market so far this year, up 11% on a total return basis (price change plus dividends) vs the S&P 500's nearly 19% gain. Yet Wall Street remains bullish on the consumer discretionary stock.
Indeed, of the 35 analysts covering LOW tracked by S&P Global Market Intelligence, 12 say it's a Strong Buy, four have it at Buy, 17 say it's a Hold and two call it a Sell or Strong Sell. This works out to a consensus recommendation of Buy.
Speaking for the bulls is financial services firm BofA Securities, which has a Buy rating and $280 price target on Lowe's stock.
"LOW is capitalizing on investments it has made to better service the small and medium-sized pro and gain share, including its pro rewards program, pro inventory (bringing back brands it had lost), and piloting some solutions for larger order job site delivery," wrote BofA Securities analyst Robert Ohmes in a June 4 note. "While share gains should support this segment, LOW's pro growth vs the industry is also supported by the relative resilience of the small to medium-sized pro, which can more easily shift from a remodel occasion to a repair occasion."
What's more, Lowe's is one of the top dividend growth stocks, having raised its payout for 50 straight years. Why does dividend growth matter?
"Shares in companies that raise their payouts like clockwork decade after decade can produce superior total returns (price change plus dividends) over the long run, even if they sport apparently ho-hum yields to begin with," writes Dan Burrows, senior investing editor at Kiplinger.com, in his feature "Best Dividend Stocks to Buy for Dependable Dividend Growth." To be sure, without calculating in Lowe's 1.9% dividend yield, the stock's year-to-date return would be closer to 8%.
Burrows adds that increases in shareholder-friendly initiatives such as dividends also offer peace of mind. "After all, any company that manages to raise its dividend year after year – through recession, war, market crashes and more – is demonstrating both its financial resilience and its commitment to returning cash to shareholders," he writes.
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
-
What Wall Street's CEOs Are Saying About Trump's Tariffs
We're in the thick of earnings season and corporate America has plenty to say about the Trump administration's trade policy.
By Karee Venema
-
The Role of the U.S. Dollar in Retirement: Is It Secure?
Protect your retirement from de-dollarization, because “capital always goes where it is treated best."
By Adam Shell
-
What Wall Street's CEOs Are Saying About Trump's Tariffs
We're in the thick of earnings season and corporate America has plenty to say about the Trump administration's trade policy.
By Karee Venema
-
To Stay on Track for Retirement, Consider Doing This
Writing down your retirement and income plan in an investment policy statement can help you resist letting a bear market upend your retirement.
By Matt Green, Investment Adviser Representative
-
How to Make Changing Interest Rates Work for Your Retirement
Higher (or lower) rates can be painful in some ways and helpful in others. The key is being prepared to take advantage of the situation.
By Phil Cooper
-
When to Sell Your Stock
Knowing when to sell a stock is a major decision investors must make. While there's no one correct answer, we look at some best practices here.
By Charles Lewis Sizemore, CFA
-
Within Five Years of Retirement? Five Things to Do Now
If you're retiring in the next five years, your to-do list should contain some financial planning and, according to current retirees, a few life goals, too.
By Evan T. Beach, CFP®, AWMA®
-
The Home Stretch: Seven Essential Steps for Pre-Retirees
The decade before retirement is the home stretch in the race to quit work — but there are crucial financial decisions to make before you reach the finish line.
By Mike Dullaghan, AIF®
-
Stock Market Today: Great Power Affairs Mesmerize Markets
The U.S. and China are at least talking about talking about tariffs, and investors, traders and speculators are showing a little less fear.
By David Dittman
-
Three Options for Retirees With Concentrated Stock Positions
If a significant chunk of your portfolio is tied up in a single stock, you'll need to make sure it won't disrupt your retirement and legacy goals. Here's how.
By Evan T. Beach, CFP®, AWMA®