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Home Depot vs. Lowe's: Which Retail Giant Is Worth Betting On?
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Key Takeaways
Home Depot's Q2 revenues rose 5.7% y/y to $47.9B, while Lowe's posted $24B in sales and 1.1% comps growth.
HD benefits from Pro investments and 11% digital growth, while Lowe's expands its contractor business.
Home Depot trades at a forward P/E of 20.19X versus Lowe's 15.45X, with both below historical medians.
The U.S. home improvement industry is witnessing an intensifying battle for market dominance as retail heavyweights The Home Depot, Inc. (HD - Free Report) and Lowe's Companies, Inc. (LOW - Free Report) compete for customer loyalty, market share and leadership in the professional contractor and do-it-yourself (DIY) segments. Home Depot remains the world's largest home improvement retailer, while Lowe's holds the second-largest position.
Both companies offer an extensive assortment of building materials, tools, appliances, home décor, and lawn and garden products through expansive store networks and digital platforms. While Home Depot leverages its scale, established contractor relationships and supply-chain capabilities to strengthen its leadership, Lowe's is expanding its professional customer business, enhancing omnichannel capabilities and refining its product assortment. With housing-market trends, renovation spending and evolving consumer preferences shaping industry dynamics, which home improvement powerhouse offers stronger investment potential? Let us find out.
The Case for HD
Home Depot maintains its leadership in the home improvement industry, supported by 2,364 stores, extensive product offerings and strong relationships with professional contractors and DIY customers. Its competitive strength was evident as 13 of 16 merchandising departments delivered positive comparable sales (comps) in second-quarter fiscal 2026. Management highlighted continued market-share gains, with Pro customers outperforming DIY shoppers. Acquisitions of SRS Distribution and GMS further strengthen its contractor-focused capabilities.
Home Depot's strategy emphasizes product innovation, Pro engagement and omnichannel convenience. Its portfolio spans building materials, tools, appliances and home improvement essentials, featuring brands like Milwaukee. Digital comps grew 11%, supported by improved fulfillment capabilities. Its AI-powered Magic Apron enhances customer assistance, while nationwide express delivery offers fulfillment within three hours. Investments in QuoteCenter and Material List Builder further strengthen contractor relationships.
Financial performance remains resilient despite housing-market challenges. Second-quarter revenues increased 5.7% year over year to $47.9 billion, while comps grew 1.7%. Adjusted earnings per share (EPS) rose 5.1% to $4.92 and the gross margin expanded to 33.7%, aided by tariff refunds. Management reaffirmed its fiscal 2026 outlook, anticipating continued sales growth and market-share gains, supported by Pro investments and operational improvements.
The Case for LOW
Lowe's maintains a strong position as the second-largest U.S. home improvement retailer, supported by its extensive product assortment and established customer relationships. Its Total Home strategy focuses on strengthening engagement among DIY customers and professional contractors while expanding market-share opportunities. The acquisition of Artisan Design Group and proposed acquisition of Foundation Building Materials were aimed at expanding its presence in the $250-billion large Pro addressable market.
Lowe's diversified portfolio spans appliances, tools, building materials, flooring, and lawn and garden products, featuring brands like DeWalt, Craftsman, Kobalt and Daltile. Its strategy emphasizes contractor-focused offerings, competitive pricing and omnichannel convenience. Digital sales increased 7.5% in second-quarter 2025, supported by MyLowe's Rewards and enhanced shopping experiences. Its AI-powered Mylow Companion improves customer assistance, while influencer partnerships target younger consumers.
Financial performance demonstrated resilience despite housing-market uncertainty. Second-quarter sales were $24 billion, with comps increasing 1.1% year over year. Adjusted EPS rose 5.6% to $4.33, while the adjusted gross margin expanded 37 basis points to 33.8%. Continued productivity initiatives, Pro investments and digital expansion support long-term growth prospects.
HD vs. LOW: How Do Estimates Stack Up?
The Zacks Consensus Estimate for Home Depot’s fiscal 2026 sales and EPS implies year-over-year growth of 4.1% and 2.2%, respectively. For fiscal 2027, the consensus estimate indicates a 3.4% rise in sales and 6.6% growth in EPS. The consensus estimate for fiscal 2026 EPS has moved down by a penny in the past seven days, while the estimate for fiscal 2027 edged down 0.3%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Lowe’s fiscal 2026 sales implies growth of 6.6% from the year-ago period’s actual, while the EPS estimate suggests a decline of 0.3%. For fiscal 2027, the consensus estimate indicates a 2.5% rise in sales and 6.1% growth in EPS. The consensus estimate for fiscal 2026 has moved down by a penny in the past seven days, while the estimate for fiscal 2027 EPS has edged down 0.2%.
Image Source: Zacks Investment Research
HD vs. LOW: A Look at Stock Performance & Valuation
Lowe’s shares have declined 8.1% in the past three months, while Home Depot has lost 5.9%.
Image Source: Zacks Investment Research
Home Depot and Lowe's have witnessed share-price declines in recent months, reflecting cautious investor sentiment amid persistent housing-market challenges and subdued home improvement demand. However, Home Depot has demonstrated relatively better resilience, with its shares experiencing a smaller decline than Lowe's.
Home Depot is trading at a forward 12-month price-to-earnings (P/E) ratio of 20.19X, below its five-year median of 21.82X. Meanwhile, Lowe’s forward P/E ratio stands at 15.45X, below its five-year median of 17.2X.
Image Source: Zacks Investment Research
From a valuation perspective, both companies are trading below their respective historical forward price-to-earnings multiples, suggesting potentially attractive entry points. Notably, Lowe's trades at a considerably lower earnings multiple than Home Depot and at a deeper discount to its historical median. While Home Depot's relative stock-price stability reflects greater investor confidence, Lowe's appears more appealing from a valuation standpoint, offering comparatively better value.
HD vs. LOW: Which Is a Better Bet?
Both Home Depot and Lowe's remain well-positioned to benefit from a potential recovery in home improvement spending, supported by their expanding professional contractor businesses and omnichannel investments. While Lowe's Total Home strategy, acquisitions and digital initiatives offer growth opportunities, Home Depot's dominant market position, extensive distribution network and stronger operational execution provide a competitive advantage. Its expanding Pro ecosystem and consistent market-share gains further strengthen its long-term growth prospects.
From an investment standpoint, Home Depot appears more compelling, supported by relatively resilient stock performance, stronger earnings growth expectations and strategic investments aimed at capturing greater contractor spending. Although Lowe's offers a cheaper valuation on an absolute basis, Home Depot's discounted valuation relative to its historical levels, combined with its superior growth outlook, makes HD the more attractive investment choice currently. Home Depot carries a Zacks Rank #3 (Hold), while Lowe’s has a Zacks Rank #4 (Sell) at present.
View the Zacks #1 Rank List
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Home Depot vs. Lowe's: Which Retail Giant Is Worth Betting On?
Key Takeaways
The U.S. home improvement industry is witnessing an intensifying battle for market dominance as retail heavyweights The Home Depot, Inc. (HD - Free Report) and Lowe's Companies, Inc. (LOW - Free Report) compete for customer loyalty, market share and leadership in the professional contractor and do-it-yourself (DIY) segments. Home Depot remains the world's largest home improvement retailer, while Lowe's holds the second-largest position.
Both companies offer an extensive assortment of building materials, tools, appliances, home décor, and lawn and garden products through expansive store networks and digital platforms. While Home Depot leverages its scale, established contractor relationships and supply-chain capabilities to strengthen its leadership, Lowe's is expanding its professional customer business, enhancing omnichannel capabilities and refining its product assortment. With housing-market trends, renovation spending and evolving consumer preferences shaping industry dynamics, which home improvement powerhouse offers stronger investment potential? Let us find out.
The Case for HD
Home Depot maintains its leadership in the home improvement industry, supported by 2,364 stores, extensive product offerings and strong relationships with professional contractors and DIY customers. Its competitive strength was evident as 13 of 16 merchandising departments delivered positive comparable sales (comps) in second-quarter fiscal 2026. Management highlighted continued market-share gains, with Pro customers outperforming DIY shoppers. Acquisitions of SRS Distribution and GMS further strengthen its contractor-focused capabilities.
Home Depot's strategy emphasizes product innovation, Pro engagement and omnichannel convenience. Its portfolio spans building materials, tools, appliances and home improvement essentials, featuring brands like Milwaukee. Digital comps grew 11%, supported by improved fulfillment capabilities. Its AI-powered Magic Apron enhances customer assistance, while nationwide express delivery offers fulfillment within three hours. Investments in QuoteCenter and Material List Builder further strengthen contractor relationships.
Financial performance remains resilient despite housing-market challenges. Second-quarter revenues increased 5.7% year over year to $47.9 billion, while comps grew 1.7%. Adjusted earnings per share (EPS) rose 5.1% to $4.92 and the gross margin expanded to 33.7%, aided by tariff refunds. Management reaffirmed its fiscal 2026 outlook, anticipating continued sales growth and market-share gains, supported by Pro investments and operational improvements.
The Case for LOW
Lowe's maintains a strong position as the second-largest U.S. home improvement retailer, supported by its extensive product assortment and established customer relationships. Its Total Home strategy focuses on strengthening engagement among DIY customers and professional contractors while expanding market-share opportunities. The acquisition of Artisan Design Group and proposed acquisition of Foundation Building Materials were aimed at expanding its presence in the $250-billion large Pro addressable market.
Lowe's diversified portfolio spans appliances, tools, building materials, flooring, and lawn and garden products, featuring brands like DeWalt, Craftsman, Kobalt and Daltile. Its strategy emphasizes contractor-focused offerings, competitive pricing and omnichannel convenience. Digital sales increased 7.5% in second-quarter 2025, supported by MyLowe's Rewards and enhanced shopping experiences. Its AI-powered Mylow Companion improves customer assistance, while influencer partnerships target younger consumers.
Financial performance demonstrated resilience despite housing-market uncertainty. Second-quarter sales were $24 billion, with comps increasing 1.1% year over year. Adjusted EPS rose 5.6% to $4.33, while the adjusted gross margin expanded 37 basis points to 33.8%. Continued productivity initiatives, Pro investments and digital expansion support long-term growth prospects.
HD vs. LOW: How Do Estimates Stack Up?
The Zacks Consensus Estimate for Home Depot’s fiscal 2026 sales and EPS implies year-over-year growth of 4.1% and 2.2%, respectively. For fiscal 2027, the consensus estimate indicates a 3.4% rise in sales and 6.6% growth in EPS. The consensus estimate for fiscal 2026 EPS has moved down by a penny in the past seven days, while the estimate for fiscal 2027 edged down 0.3%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Lowe’s fiscal 2026 sales implies growth of 6.6% from the year-ago period’s actual, while the EPS estimate suggests a decline of 0.3%. For fiscal 2027, the consensus estimate indicates a 2.5% rise in sales and 6.1% growth in EPS. The consensus estimate for fiscal 2026 has moved down by a penny in the past seven days, while the estimate for fiscal 2027 EPS has edged down 0.2%.
Image Source: Zacks Investment Research
HD vs. LOW: A Look at Stock Performance & Valuation
Lowe’s shares have declined 8.1% in the past three months, while Home Depot has lost 5.9%.
Image Source: Zacks Investment Research
Home Depot and Lowe's have witnessed share-price declines in recent months, reflecting cautious investor sentiment amid persistent housing-market challenges and subdued home improvement demand. However, Home Depot has demonstrated relatively better resilience, with its shares experiencing a smaller decline than Lowe's.
Home Depot is trading at a forward 12-month price-to-earnings (P/E) ratio of 20.19X, below its five-year median of 21.82X. Meanwhile, Lowe’s forward P/E ratio stands at 15.45X, below its five-year median of 17.2X.
Image Source: Zacks Investment Research
From a valuation perspective, both companies are trading below their respective historical forward price-to-earnings multiples, suggesting potentially attractive entry points. Notably, Lowe's trades at a considerably lower earnings multiple than Home Depot and at a deeper discount to its historical median. While Home Depot's relative stock-price stability reflects greater investor confidence, Lowe's appears more appealing from a valuation standpoint, offering comparatively better value.
HD vs. LOW: Which Is a Better Bet?
Both Home Depot and Lowe's remain well-positioned to benefit from a potential recovery in home improvement spending, supported by their expanding professional contractor businesses and omnichannel investments. While Lowe's Total Home strategy, acquisitions and digital initiatives offer growth opportunities, Home Depot's dominant market position, extensive distribution network and stronger operational execution provide a competitive advantage. Its expanding Pro ecosystem and consistent market-share gains further strengthen its long-term growth prospects.
From an investment standpoint, Home Depot appears more compelling, supported by relatively resilient stock performance, stronger earnings growth expectations and strategic investments aimed at capturing greater contractor spending. Although Lowe's offers a cheaper valuation on an absolute basis, Home Depot's discounted valuation relative to its historical levels, combined with its superior growth outlook, makes HD the more attractive investment choice currently. Home Depot carries a Zacks Rank #3 (Hold), while Lowe’s has a Zacks Rank #4 (Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.