Sometimes winning means losing less badly than everyone else. That's the story with Lowe's Companies Inc. (LOW) on Wednesday, where shares climbed despite the company reporting third-quarter sales that underwhelmed expectations.
The home improvement giant posted comparable sales growth of just 0.4%, missing the consensus estimate of 1.0%, and lowered its full-year guidance. Not exactly the stuff that usually sends stocks higher. But here's the twist: those numbers still looked better than what Home Depot Inc. (HD) delivered, according to Telsey Advisory Group.
The Analyst Take
Joseph Feldman at Telsey Advisory maintained his Outperform rating on Lowe's with a $305 price target. His reasoning centers on relative performance in a tough market.
The company blamed its softness on "a lack of storms and a cautious consumer," Feldman noted. Total sales rose 3.2% to $20.8 billion, while earnings came in at $3.06 per share, beating the consensus estimate of $2.97.
Why Lowe's Wins the Comparison
Feldman pointed to two key areas where Lowe's outperformed Home Depot:
- Comparable sales growth of 0.4% versus Home Depot's 0.2%
- Maintained earnings guidance of $12.25 per share for fiscal 2026, staying within its prior range of $12.20-$12.45 per share, while Home Depot slashed its full-year guidance by roughly 46 cents per share
It's worth noting that neither retailer had a great quarter. Calm weather means fewer emergency repairs for storm damage, which typically drives demand for roofing materials, plywood, and electrical supplies. And cautious consumers aren't exactly rushing out to renovate their kitchens.
Market Reaction
Lowe's shares jumped 5.21% to $231.02 on Wednesday, suggesting investors appreciated the relative outperformance even in a challenging environment.
