RBC Capital reaffirmed a Sector Perform rating and a $257.00 price target on Lowe’s following the retailer’s latest quarter, citing a cautious near-term margin outlook that fell short of investor hopes.
For the fourth quarter, Lowe’s reported comparable sales growth of 1.3%, outpacing the consensus call of 0.2%. Adjusted earnings per share were $1.98, a 2% increase year-over-year and approximately 2% above the consensus estimate of $1.94.
The company’s shares trade at $278.59, reflecting a market capitalization of $156.28 billion and a price-to-earnings ratio of 23.09.
Looking ahead, Lowe’s provided 2026 comparable sales guidance of flat to up 2%. That topline outlook was largely anticipated, the note said, after Home Depot released its results the day prior. More materially for investors, Lowe’s set adjusted operating margin guidance in the 11.6% to 11.8% range - a forecast that the market considered disappointing.
RBC highlighted several factors that appear to have influenced management’s conservative guidance: dilution related to ADG and FBM, a persistently muted housing market, and renewed uncertainty over tariffs. The firm also raised the question of whether the company’s guidance fully reflects these risks or if there remains downside risk to the current earnings-per-share outlook.
Independent subscription-based analysis available to investors flagged Lowe’s as appearing overvalued at current market levels. The company’s long record of shareholder returns was noted - Lowe’s has increased its dividend for 42 consecutive years - and that fact is one among a set of investing tips and research materials offered through paid research services.
Separate developments included a renewed and expanded marketing agreement between Lowe’s and Inter Miami CF. Under the arrangement, Lowe’s becomes the Main Partner and the Official Jersey Sleeve Partner across the club’s teams, with the company’s mark to appear on the jersey sleeves of the First Team, the MLS Next Pro squad, and Academy sides.
Other analyst moves accompanied Lowe’s update. Truist Securities raised its price target on Lowe’s to $269 from $256 while maintaining a Buy rating, citing expectations for lower interest rates and an aging housing stock that could support demand for home improvement. By contrast, Stifel trimmed its price target on Home Depot to $350 from $370 while keeping a Hold rating, after Home Depot’s fiscal third-quarter 2025 results and revised guidance revealed unexpected weakness in certain categories.
Bernstein named Costco and Target as retail stocks to watch in 2026, reiterating an Outperform on Costco and noting that stronger international expansion could help membership fee income grow, representing potential upside to current valuations.
Taken together, the quarter and subsequent guidance have created a mixed picture: solid but unspectacular top-line and earnings beats, coupled with a margin outlook and risk factors that give analysts pause. Investors and market participants will likely watch for further color from management on dilution impacts, tariff developments, and housing trends when assessing Lowe’s near-term earnings trajectory.