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    Lowe’s (LOW) Valuation Check After Earnings Beat, Raised Guidance, and Boosted Housing-Sector Sentiment

    Simply Wall St·12/14/2025 02:30:21
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    Lowe's Companies (LOW) just delivered another earnings beat and raised its full year sales outlook. The stock is benefiting from rising margins, stronger Pro and online demand, and growing optimism about potential rate cuts.

    See our latest analysis for Lowe's Companies.

    Despite a softer 90 day share price return of 9.03%, Lowe's 1 month share price return of 5.36% and five year total shareholder return of 66.13% suggest longer term momentum and confidence are still very much intact around the story.

    If Lowe's latest earnings beat has you thinking about what else could surprise to the upside, it is worth exploring fast growing stocks with high insider ownership for potential new ideas.

    With shares still trading at a discount to analyst targets and modestly below some intrinsic value estimates, the key question now is whether investors are looking at a genuine value opportunity or a stock that already reflects future growth.

    Most Popular Narrative: 9.3% Undervalued

    With Lowe's last closing at $247.29 against a narrative fair value of $272.50, this framework implies the market is still discounting its long term potential.

    Ongoing pent up demand from delayed home improvement projects, combined with record high aging U.S. housing stock and an estimated 18 million new homes needed by 2033, points to a significant runway for future growth in renovation, repair, and new construction. This will positively affect revenue and support sustained top line expansion as the housing cycle recovers.

    Read the complete narrative.

    Want to see how steady sales growth, rising margins, and a richer earnings multiple all intersect in this story? The full narrative lays out the numbers behind that 9 percent gap, including the earnings step up and valuation reset it assumes. Curious how far profitability has to climb, and how long it needs to last, to justify that price?

    Result: Fair Value of $272.50 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, lingering integration challenges from recent acquisitions and elevated debt levels could quickly erode the upside if execution or financing conditions disappoint.

    Find out about the key risks to this Lowe's Companies narrative.

    Build Your Own Lowe's Companies Narrative

    If you see the story differently or want to stress test the assumptions yourself, you can build a custom narrative in just a few minutes: Do it your way

    A great starting point for your Lowe's Companies research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.