Lowe's Pro Segment Boost: $1.3B Deal May Fuel Rebound

Lowe’s Companies Inc. (NYSE: LOW) won’t report earnings until May 20, 2025. However, the company gave investors something to think about in advance of the earnings call. In mid-April, Lowe’s announced it was acquiring Artisan Design Group (ADG) for $1.325 billion. The all-cash deal is expected to close by the end of the current calendar quarter.

The move comes almost exactly a year after rival Home Depot (NYSE: HD) acquired SRS Distribution, a company that provides goods and materials for home improvement contractors. Lowe’s is targeting the same channel with its latest acquisition. ADG is a nationwide provider of design, distribution, and installation services for interior surface finishes such as flooring, cabinets and countertops.

Investors in the home improvement space frequently focus on the duopoly of Lowe’s and Home Depot. It hasn’t been a great year for either company, and that’s reflected in their stock prices, which are down over 11% and 8%, respectively. Will a move like this be enough to change the short-term fortunes of LOW stock?

Lowe’s Is Leaning Into the Trend

Obviously, continued weakness in the housing sector contributed to LOW stock's poor performance in 2025. But while the do-it-yourself market may be down as consumers hold off on projects, Lowe’s foresees more spending in the professional/contractor business.

In a statement about the ADG acquisition, Lowe’s chief executive officer (CEO), Marvin R. Ellison remarked, "With more than 18 million homes needed in the United States by 2033, we expect new home construction will be a major driver of Pro planned spend for the next decade. The acquisition of ADG allows us to build on our momentum with Pro planned spend and is expected to expand our total addressable market by approximately $50 billion."

Ellison also remarked that ADG has best-in-class customer satisfaction scores from the top builders in the United States.

This is in addition to the growth that Lowe’s is seeing in its Pro business. In its last earnings report, Lowe’s delivered revenue of $18.6 billion.

While it doesn’t break out the specific revenue it received from its Pro business, the company did show a return to growth in comparable store sales. The reason for that was high single-digit comparable sales growth in the Pro category. The company also launched MyLowe’s Pro rewards, a redesigned loyalty program tailored to small—and medium-sized professionals.

Is LOW Stock Fairly Valued?

Of course, it’s one thing to point to possible catalysts for LOW stock. It’s another thing to decide if the stock is fairly valued. Like many things, the answer to that question may depend largely on what metrics you prefer.

Based on its discounted cash flow, Lowe's stock looks fairly valued. It’s important to note, however, that the company’s cash flow has been impacted by aggressive share repurchases, which increased its debt. That is expected to moderate in 2025.

However, with a price-to-earnings (P/E) ratio of around 18.6x, it’s below its three-year average of 19.25x. That means that LOW stock isn’t too expensive at a time when many stocks, especially technology stocks, continue to trade at premium valuations. And, as of this writing, the stock’s Relative Strength Indicator was around 32 which was moving into oversold territory.

Analysts give Lowe's stock a Moderate Buy rating with a consensus price target of $278.74. That’s a 24.4% gain, matched by the company’s secure dividend, which yields 2.06% as of this writing. Lowe’s is also a dividend king, having increased its dividend for 53 consecutive years.

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