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    Does Lowe’s Push Into Pro Services And Higher-Margin Deals Reshape The Bull Case For LOW?

    Simply Wall St·12/25/2025 19:21:40
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    • Lowe’s Companies has been expanding its professional services arm through acquisitions such as Artisan Design Group and Foundation Building Materials in 2025, aiming to better serve contractors and offset weaker DIY trends and pressured margins.
    • This shift, alongside a rising but still moderate level of short interest and a long record of dividend growth, highlights how Lowe’s is reshaping its business mix while facing competitive and debt-related constraints.
    • We’ll now explore how Lowe’s push into higher-margin professional services, including the Foundation Building Materials deal, affects its broader investment narrative.

    Find companies with promising cash flow potential yet trading below their fair value.

    Lowe's Companies Investment Narrative Recap

    To own Lowe’s today, you need to believe its pivot toward higher-margin professional customers can offset softer DIY demand, modest recent sales declines and pressure from high debt and competition. The latest news on acquisitions and earnings revisions does not materially change the near term catalyst, which still centers on successful integration of Foundation Building Materials and Artisan Design Group, while the biggest near term risk remains that elevated leverage tightens margins if housing activity and in store traffic stay sluggish.

    Among recent announcements, Lowe’s 2025 acquisition of Foundation Building Materials stands out because it directly targets faster growth in the Pro segment, which now accounts for roughly 40% of revenue. That deal ties into the main catalyst of expanding Pro wallet share and improving margins via higher ticket transactions, even as same store sales have been under pressure and gross margins sit near 33.4%, reminding investors that execution on Pro expansion carries increased financial and operational scrutiny.

    Yet behind Lowe’s dividend growth and Pro expansion, the higher leverage from funding FBM is something investors should be aware of as it could...

    Read the full narrative on Lowe's Companies (it's free!)

    Lowe's Companies' narrative projects $94.0 billion revenue and $8.4 billion earnings by 2028. This requires 4.0% yearly revenue growth and about a $1.6 billion earnings increase from $6.8 billion today.

    Uncover how Lowe's Companies' forecasts yield a $272.97 fair value, a 12% upside to its current price.

    Exploring Other Perspectives

    LOW 1-Year Stock Price Chart
    LOW 1-Year Stock Price Chart

    Five members of the Simply Wall St Community currently see Lowe’s fair value between US$234 and about US$273, underscoring how far opinions can differ. When you add in the execution risk around integrating FBM and ADG, it becomes even more important to weigh several viewpoints before deciding how Lowe’s fits into your expectations for future performance.

    Explore 5 other fair value estimates on Lowe's Companies - why the stock might be worth as much as 12% more than the current price!

    Build Your Own Lowe's Companies Narrative

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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.