LOW: Q1 Comps Fall Short; PPI Levers Drive EPS Beat and FY26 Guide Stays Intact

研报英文原文证据摘录

LOW: Q1 Comps Fall Short; PPI Levers Drive EPS Beat and FY26 Guide Stays Intact

Lowe's Companies, Inc. Equity Research

Investment Thesis, Valuation and Risks

Lowe's Companies, Inc. (LOW)

Investment Thesis

Potential for change drives our Overweight view, and we see upside from initiatives to drive Pro, merchandising, and profit improvements.

Self-help levers remain intact, and we see a long runway to take share in a fragmented industry.

Target Price Valuation for LOW

Our $260 price target is based on ~19x (~9%+ vs. the 5-year NTM P/E average of ~17.5x) our FY27 EPS, reflecting our confidence

that macro/housing pressures abate in time; while Pro, merchandising and profit levers prove LT share gains and margin expansion

opportunities.

Risks to Our Price Target and Rating for LOW

Risks to our thesis include macro and housing market deceleration, heightened competition, and execution risk around stated goals.

The Home Depot, Inc. (HD)

HD is a best-in-class operator with a strong management team and LT track record for exceeding stated goals. Supportive LT secular

trends shape our Overweight view, and we see increasing potential for HD to win and take share in a growing, yet still fragmented industry.

Target Price Valuation for HD

Our $360 price target is based on ~22.5x our FY27 EPS estimate (a slight premium vs. the 5-year average of ~22x via ongoing share gains,

etc.). This implies EV/EBITDA of ~16x.

Risks to Our Price Target and Rating for HD

Risks to our thesis include macro and housing market deceleration, rising interest rates, heightened competition, and execution risk.

Companies Mentioned in Report

Company Name Ticker Last Price

(05/19/26)

Lowe's Companies, Inc. LOW $218.37

The Home Depot, Inc. HD $302.44

Source: Wells Fargo Securities LLC Estimates, FactSet