Telsey maintains Lowe’s stock outperform with $305 target

On Tuesday, Telsey Advisory Group sustained its positive outlook on Lowe’s Companies Inc. (NYSE: NYSE:LOW), maintaining an Outperform rating and a $305.00 price target for the home improvement retailer’s shares. With a current market capitalization of $125.45 billion and trading at a P/E ratio of 18.4x, InvestingPro analysis suggests the stock is currently trading above its Fair Value. Telsey analysts highlighted the strategic benefits of Lowe’s acquisition of ADG, emphasizing its potential to enhance the company’s market position and growth prospects, particularly within the professional customer segment.

The acquisition is seen as a key move in Lowe’s strategy to better serve property managers and small-to-medium sized professional customers—a demographic the company has been actively targeting. With annual revenue of $83.67 billion and a "GOOD" Financial Health Score according to InvestingPro, Telsey analysts believe that this initiative, along with others, will contribute to Lowe’s ability to return to positive sales and earnings growth in 2025, with expectations for more normalized growth in 2026.

Analysts attribute the anticipated growth to a recovery in the industry, market share gains, and improved profitability driven by strategic initiatives. These initiatives include strengthening merchandising and space productivity through localization and an increased presence of private brands, leveraging technology with new AI tools in-store and across operations, broadening the omnichannel model with an online marketplace and retail media network, and expanding the professional business with a new loyalty program, expanded product offerings, and service offerings.

Despite potential challenges from increased tariffs under the new Trump administration, which are expected to impact earnings, Telsey analysts believe that Lowe’s effective management positions it favorably compared to other retailers in the current environment. As a prominent player in the Specialty Retail industry with a 41-year dividend growth streak, the company has demonstrated remarkable resilience. The $305 price target is derived from applying a price-to-earnings (P/E) multiple of approximately 22 times to Telsey’s 2026 earnings per share (EPS) estimate of $13.63. Discover more exclusive insights and 6 additional ProTips with a InvestingPro subscription, including comprehensive analysis in our Pro Research Report.

In other recent news, Lowe’s Companies, Inc. has announced a definitive agreement to acquire Artisan Design Group for $1.325 billion. This strategic acquisition aims to expand Lowe’s professional services offerings and is expected to close in the second quarter of 2025, subject to regulatory approvals. Artisan Design Group, known for its design and installation services for interior finishes, reported a fiscal 2024 revenue of approximately $1.8 billion. In a separate development, Lowe’s board of directors declared a quarterly dividend of $1.15 per share, to be paid on May 7, 2025, to shareholders of record as of April 23, 2025. Additionally, DA Davidson has maintained a Neutral rating on Lowe’s, with a price target of $270.00, noting the company’s first positive comparable store sales since the third quarter of 2023. Lowe’s has also partnered with Mesa to offer cardmember credits, allowing Mesa Homeowners Card members to earn up to $120 in annual statement credits through purchases at Lowe’s. These developments reflect Lowe’s ongoing efforts to enhance its market position and provide value to its shareholders and customers.

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