Lowe’s Companies, Inc. (NYSE:LOW) stock declined Wednesday after the home improvement retailer posted fourth-quarter results and delivered a cautious fiscal 2026 outlook, highlighting ongoing strain in the housing market.
Earnings Snapshot
Net sales rose 10.9% to $20.584 billion from $18.553 billion and exceeded the $20.334 billion analyst estimate.
During the quarter, the company recognized $149 million in pre-tax expenses associated with the acquisitions of Foundation Building Materials (FBM) and Artisan Design Group (ADG), which impacted reported results.
Excluding these expenses, adjusted diluted EPS increased 2.6% to $1.98 from $1.93 a year earlier and beat the $1.94 analyst estimate.
The company has issued its fiscal 2026 outlook, citing continued uncertainty in the home improvement market.
For fiscal 2026, Lowe’s forecasts total sales of $92.0 billion to $94.0 billion, compared with the $93.229 billion analyst estimate, and comparable sales expected to be flat to up 2%.
The company projected adjusted diluted EPS of approximately $12.25 to $12.75, compared with the $12.95 analyst estimate.
On the earnings call, Lowe’s CEO Marvin R. Ellison said the housing market remains under pressure and emphasized that the company will remain focused on ongoing productivity initiatives to navigate the challenging environment.
Analyst View
JP Morgan analyst Christopher Horvers writes that the company posted mixed results, with fourth-quarter same-store sales of 1.3% exceeding the 0.5% estimate.
EPS beat consensus by 2%, but the company issued 2026 guidance roughly 3% below consensus at the midpoint, adds the analyst.
Horvers says that the offsetting positive is that the EPS outlook appears conservative relative to expected sales trends.
The analyst writes that fiscal 2026 guidance compares to their expectation for flat-2% comps and ~$13.10 EPS at the midpoint.
Technical Analysis
Lowe’s is currently trading 4.7% below its 20-day simple moving average (SMA) of $277.32 and just 0.1% below the 50-day SMA of $264.63. This indicates a short-term bearish trend despite being 5% above the 100-day SMA and 7.9% above the 200-day SMA, showing some resilience in a longer-term perspective.
Over the past 12 months, the stock has seen an increase of 8.99%, and it is positioned closer to its 52-week high of $293.06 than its low of $206.38.
Top ETF Exposure
- State Street Consumer Discretionary Select Sector SPDR ETF (NYSE:XLY): 3.70% Weight
- iShares US Home Construction ETF (BATS:ITB): 4.72% Weight
- State Street SPDR S&P Homebuilders ETF (NYSE:XHB): 3.57% Weight
Significance: Because LOW carries significant weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.
LOW Price Action: Lowe’s Companies shares were down 5.50% at $263.25 at the time of publication on Wednesday, according to Benzinga Pro data.
Photo via Shutterstock
