Overview of Coverage#
BofA Securities has started coverage on Lowe’s Companies Inc. (NYSE:LOW) with a Neutral rating. The firm has set a price target of $260 for the stock, which is currently trading at $223.72.
Valuation Insights#
Analyst Christopher Nardone highlighted that Lowe’s shares are trading at 17 times their earnings, which is about 13% lower than competitor Home Depot. This valuation is close to a five-year high relative to its historical performance. The stock also appears overvalued compared to its Fair Value, according to analysis from InvestingPro. Additionally, Lowe’s shares are near their 52-week low of $210.33.
Earnings Forecast#
BofA Securities predicts a modest earnings growth for Lowe’s, estimating a 3% annual growth rate over the next two years. The firm notes that the lack of significant catalysts and subdued housing activity may limit earnings growth.
Price Target Justification#
The $260 price target is based on a price-to-earnings ratio of 20 for the fiscal year 2027, which is slightly above the company’s long-term average. BofA attributes this premium valuation to Lowe’s higher proportion of professional customers and improvements in profit margins compared to its past performance.
Recent Developments#
In other news, Lowe’s has announced a quarterly cash dividend of $1.20 per share, payable on May 6, 2026. UBS has reiterated a Buy rating on Lowe’s with a price target of $315, citing steady market share gains. Meanwhile, TD Cowen has lowered its price target from $295 to $280 while maintaining a Hold rating, reflecting concerns about revenue and margin expectations. DA Davidson has also kept a Neutral rating with a $275 price target, acknowledging that Lowe’s has exceeded revenue expectations partly due to storm-related sales.