Lowe's Companies, Inc. (LOW): A Bull Case Theory

We came across a bullish thesis on Lowe's Companies, Inc. (LOW) on Rijnberk InvestInsights' Substack. In this article, we will summarize the bulls' thesis on LOW. Lowe's Companies, Inc. (LOW)'s share was trading at $225.73 as of 30th May. LOW's trailing and forward P/E were 18.67 and 18.42 respectively according to Yahoo Finance.
Home improvement tools
Last week, Lowe's Companies reported fiscal Q1 earnings that failed to excite Wall Street, causing shares to drop about 2% the following day and roughly 1% over the week. While Lowe's reaffirmed its FY25 guidance alongside its larger rival Home Depot, the results underscored ongoing consumer spending weakness, raising concerns about a possible economic slowdown or shallow recession that could extend into 2026. Given Lowe's heavy reliance on discretionary consumer spending, this cautious outlook weighed on investor sentiment, leaving shares nearly flat over the past year despite some earlier gains following Home Depot's solid report.
However, beneath the short-term headwinds, Lowe's continues to make meaningful progress in strengthening its business for long-term growth. The company's aggressive push into the professional 'Pro' market, traditionally dominated by Home Depot, has yielded market share gains in a valuable segment, while investments in its technology and online platforms have driven sales growth. These strategic moves position Lowe's to outperform the broader market over time under its current management. The home improvement sector, though cyclical and sensitive to economic shifts, benefits from secular trends such as increasing homeowner investments in renovations, driven by rising home values, personalization desires, and lifestyle changes like remote work.
With over half of U.S. homes built before 1980, demand for upgrades and repairs remains strong, supporting an industry growth rate expected to reach 5.2% CAGR through 2032. Despite near-term uncertainties and the need for valuation discipline, Lowe's robust market position and moat underpin a bullish long-term outlook, making it an attractive investment when priced appropriately.
Lowe's Companies, Inc. (LOW) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 68 hedge fund portfolios held LOW at the end of the first quarter which was 70 in the previous quarter. While we acknowledge the risk and potential of LOW as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article was originally published at Insider Monkey.

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