Lowe's Reports Strong Sales Growth As Analysts Back $8.8 Billion Pro Market Push

As the home improvement sector navigates a challenging market environment, major players like Lowe’s Companies Inc. (NYSE:LOW) are finding ways to thrive through strategic moves and solid financial performances. This landscape has seen companies adapting to shifting consumer demands and weather-related disruptions while seeking growth through acquisitions. Lowe’s reported upbeat second-quarter results on Wednesday, and here are some key analyst takeaways. KeyBanc Capital Markets analyst Bradley Thomas maintained an Overweight rating, while raising the price target from $266 to $300. DA Davidson analyst Michael Baker reaffirmed a Neutral rating, while revising the price target higher from $240 to $266. RBC Capital Markets analyst Steven Shemesh reiterated a Sector Perform rating, while raising the price target from $243 to $260. JPMorgan analyst Christopher Horvers maintained an Overweight rating, while lifting the price target from $280 to $283. Telsey Advisory Group analyst Joseph Feldman reiterated an Outperform rating and price target of $305. Check out other analyst stock ratings. KeyBanc Capital Markets: Lowe’s Companies reported comps growth of 1.1%, the strongest in more than two years, "driven by growth in both Pro and DIY, despite unfavorable weather early in the quarter," Thomas said in a note. Comps came in line with expectations, while earnings topped consensus estimates, he added. Big-ticket comps grew 3.6% in the second quarter, accelerating from 1.3% in the previous quarter, the analyst stated. Lowe's Companies also announced the acquisition of Foundation Building Materials (FBM) for around $8.8 billion, which is "expected to increase LOW's Pro penetration and its ability to serve the larger Pro within a $250B TAM," he further wrote. DA Davidson: The acquisition of Foundation Building Materials is likely to be accretive by 1 cent per share in year one, Baker said. "This excludes any revenue or cost synergies but includes the loss of $0.19 to our 2026 EPS estimate from eliminating 8M in buybacks from our 2026 model," he wrote. Assuming $130 million in cost synergies translates to an accretion of 19 cent per share, again including the elimination of share buybacks, the analyst stated. The acquisition jumpstarts Lowe’s entry into the complex pro market, he added. RBC Capital Markets: Lowe's comps improved through the quarter, with a 1.0% contraction in May, 0.3% growth in June, and 4.7% growth in July, Shemesh said. Adjusted gross margin expanded to 33.8%, topping consensus estimates, he added. The FBM acquisition is expected to become accretive in the first quarter of 2026, the analyst stated. He raised the comp and adjusted earnings estimates for the third quarter from 0.5% to 1.0% and from $2.92 per share to $2.94 per share. JPMorgan: Although Lowe's comp averaged 1.1% in the quarter, July comp almost reached 5%, Horvers said. The FBM acquisition reaffirms the company's message during December that "it's time to grow," he added. The acquisition expands Lowe's total addressable market and "represents an escalation of deals in the residential/commercial building products distribution space," following Home Depot Inc's (NYSE:HD) GMS deal and activity by QXO Inc (NYSE:QXO), the analyst wrote. The company indicated that it does not need to make more deals of this scale, he added. Telsey Advisory Group: Lowe’s reported adjusted earnings of $4.33 per share, topping consensus estimate of $4.24 per share, Feldman said. Management raised their 2025 guidance for adjusted earnings from $12.15-$12.40 per share to $12.20-$12.45 per share, versus the consensus of $12.24 per share, he added. The latest guidance reflects sales of $84.5 million-$85.5 billion, versus $83.5 million-$84.5 billion previously and incorporates the ADG acquisition, the analyst stated. The company has announced "another promising acquisition," that of FBM, "to deepen its Pro presence," he further wrote. LOW Price Action: Lowe’s Companies shares were down 0.78% at $255.14 at the time of publication on Thursday, according to Benzinga Pro data. Read More: Lowe’s Raises Outlook, Expands Pro Reach With $8.8 Billion Acquisition Photo: Shutterstock