Stifel cuts Lowe’s stock price target to $240 from $250

On Tuesday, Stifel analysts revised their price target for Lowe’s Companies Inc (NYSE:LOW), reducing it from $250.00 to $240.00, while reaffirming a Hold rating on the stock. The adjustment followed the company’s financial results for the first quarter of fiscal year 2025, which surpassed Stifel’s projections. Currently trading at $221.07, InvestingPro analysis suggests the stock is slightly overvalued. Lowe’s reported that its comparable sales picked up momentum throughout the quarter, though revenue showed a 2.52% decline over the last twelve months.

Despite the better-than-expected performance in the first quarter, Stifel expressed concerns about the sustainability of Lowe’s sales growth. The analysts noted that while the quarter’s results were strong, the exit rate did not instill full confidence in the company’s ability to meet its full-year 2025 sales targets. InvestingPro data reveals 15 analysts have revised their earnings downward for the upcoming period, though the company maintains a GOOD financial health score. Moreover, there were doubts about the company’s capacity to achieve the acceleration needed to underpin Stifel’s projections for fiscal years 2026 and 2027.

The analysts also highlighted the impact of Home Depot (NYSE:HD)’s recent remarks on pricing strategies amidst new tariff regulations. This has sparked discussions about the potential for both home improvement retailers to maintain profit margins. Despite challenges, Lowe’s maintains a healthy gross profit margin of 33.36% and has consistently paid dividends for 55 consecutive years. Given Home Depot’s comparatively stronger performance, the conversation has brought additional scrutiny to Lowe’s, according to Stifel.

Stifel anticipates that Lowe’s stock may experience limited movement in the near term. The firm’s slightly lower price target compared to retail sector peers reflects a cautious stance, considering the significant improvements required for Lowe’s to align with Stifel’s long-term earnings expectations for fiscal years 2026 and 2027. The stock currently trades near its 52-week low of $206.38, with analyst targets ranging from $207 to $305. For deeper insights into Lowe’s valuation and prospects, access the comprehensive Pro Research Report available on InvestingPro.

In other recent news, Lowe’s Companies Inc. reported first-quarter earnings that were positively received, with resilience in comparable store sales noted by TD Cowen. Despite a 1.7% decline in comparable sales due to early quarter weather impacts, Truist Securities highlighted an acceleration in sales as conditions improved, leading them to raise Lowe’s price target to $264 while maintaining a Buy rating. KeyBanc Capital Markets also maintained an Overweight rating with a $266 price target, citing strong performance in the professional contractor segment and online sales growth. RBC Capital Markets, however, reduced Lowe’s price target slightly to $242, maintaining a Sector Perform rating and expressing concerns over softer demand and tariff-related costs.

BNP Paribas (OTC:BNPQY) Exane lowered Lowe’s price target to $207, maintaining an Underperform rating and highlighting the company’s challenges in the DIY market compared to Home Depot. The firm’s analysis noted Lowe’s strategic initiatives, including its acquisition to expand into the professional contractor segment, but remained cautious due to economic pressures and industry competition. TD Cowen acknowledged Lowe’s acquisition of Associated Distributors Group, projecting a modest contribution to revenue growth in the second half of the fiscal year. Meanwhile, Lowe’s management reaffirmed its financial guidance for 2025, with analysts differing on the company’s future prospects amid current market dynamics.

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