Lowe’s is heading into its second-quarter earnings release trading at a valuation that is cheaper than its own history, a setup that could draw investor attention ahead of the Aug. 19 report. The home improvement retailer’s price-to-earnings multiple of 18.5 is below its historical average of 20.5, while its forward P/E of 17.4 is the lowest since the end of 2023.
Shares are also supported by an investor-friendly shareholder return track record. Lowe’s raised its dividend in July to $1.25 per share, corresponding to a stated yield of 2.28%, extending its streak of 55 consecutive years of dividend increases.
Key takeaways
- Valuation: Lowe’s P/E is currently 18.5, below its historical average of 20.5, with a forward P/E of 17.4—its lowest since the end of 2023.
- Catalyst: The company reports second-quarter results on Aug. 19, with investors focused on comparable-store sales and earnings trends.
- Earnings expectations: Analysts anticipate revenue of $26.2 billion and adjusted earnings of $4.24 per share, influenced by acquisition-related costs.
- Dividend support: The dividend increase to $1.25 per share reinforces the stock’s income appeal amid earnings volatility.
- Implication: A beat on sales and operating metrics—especially comparable-store performance—could prompt a repricing higher from today’s discount.
What to watch in Q2 earnings
According to analyst expectations cited in the article, Lowe’s second-quarter revenue is forecast at $26.2 billion, up 13% versus the prior quarter. Adjusted earnings are expected to come in at $4.24 per share, down from $4.33 per share in Q2 2025, largely tied to costs associated with recent acquisitions.
Investors are expected to home in on comparable-store sales, projected to be flat to up 2%. Comparable-store sales remain a key read-through for demand in the home improvement cycle; if the metric lands at the upper end of that range or above it, the article suggests the stock could react positively.
The company’s online business is another metric to monitor. The article notes that Lowe’s reported a 15% gain in online sales last quarter and frames continued progress as a factor that could help underpin expectations for growth.
Why the valuation discount matters
The article’s central point is that Lowe’s valuation appears subdued relative to its own trading history. A lower P/E than the historical average can matter in two ways for investors: it can reduce the “margin for error” needed to justify the stock, and it can create room for multiple expansion if results and guidance confirm improving fundamentals.
The forward P/E reaching a level not seen since late 2023 adds to the argument that expectations may already be tempered. If the earnings release shows resilience in revenue and stronger-than-expected store trends, the market could interpret the discount as an opportunity rather than a warning sign—especially with a dividend that continues to be a visible element of the investment case.
Investor focus beyond core retail
In addition to traditional DIY retail metrics, investors are likely to listen for management commentary around Lowe’s Pro business—its higher-margin offering serving contractors. While the article says the company does not disclose Pro growth rates directly, it suggests that management’s discussion of Pro performance typically provides insight into whether that segment is gaining momentum.
The article also frames Pro strength as potentially meaningful for competitive dynamics, noting that Pro growth can indicate whether Lowe’s is taking share from Home Depot.
Market reaction and what could shift the narrative
While the article points to the potential for a share price jump if comparable-store sales and other operating indicators come in strong, it also implicitly highlights the risk that acquisitions-related costs could keep adjusted earnings under pressure. That mix—stronger sales but constrained earnings—often determines how investors weigh near-term profitability versus longer-term momentum.
Heading into the report, the combination of a valuation discount, a long dividend growth record, and expectations for comparable-store sales within a narrow range sets up a relatively binary setup. An upside surprise could accelerate the rerating of the stock; a miss or weaker commentary on key demand drivers could reinforce skepticism reflected in the discount.
What to watch next: Lowe’s will report its second-quarter results on Aug. 19. Investors are likely to focus on comparable-store sales versus the flat-to-up-2% outlook, adjusted earnings performance in the context of acquisition costs, and any updates on online growth and the trajectory of Pro demand.
