Lowe’s Companies (LOW) announced its 2025 Total Home Strategy during an investor event earlier this week. The home improvement retailer presented five key growth initiatives, AI enhancements, and long-term financial goals to drive its next phase of transformation. This strategy has resulted in Wall Street analysts being optimistic about the stock.
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LOW Reveals Growth Initiatives
Lowe’s strategy includes raising its store count by opening 10 to 15 stores every year, expanding its online assortment with “the initial launch of the first product marketplace in the U.S Home Improvement industry.” Additionally, the retailer intends to improve merchandising, store space utilization, and leveraging AI. Furthermore, the company is looking at expanding its “Pro” customer segment, targeting professional contractors and service providers.
Moreover, LOW affirmed its outlook for FY24 and expects total sales in the range of $83 billion to $83.5 billion while adjusted earnings are likely to be between $11.80 and $11.90 per share.
Wall Street Analysts Are Upbeat about LOW
Following the Investor Day, Wall Street analysts are upbeat about LOW stock. Raymond James analyst Bobby Griffin noted that the retailer operates in a $1 trillion fragmented home improvement market, split equally between DIY (do-it-yourself) and Pro customers.
As a result, the analyst pointed out that with LOW’s current sales split of 70% DIY and 30% Pro, there is a significant opportunity for Lowe’s to expand the penetration of its Pro segment. Additionally, Griffin approved of LOW’s FY24 outlook and stated, “Given current industry demand trends and the factors hindering home improvement demand (higher interest rates, inflation, COVID pull forward of HI (home improvement) spending, etc.), we agree with the scenario approach to 2025 outlook.”
Griffin has a Hold rating on LOW stock.
Is LOW Stock a Buy or Sell?
Analysts remain cautiously optimistic about LOW stock, with a Moderate Buy consensus rating based on 18 Buys and eight Holds. Over the past year, LOW has surged by more than 20%, and the average LOW price target of $290.59 implies an upside potential of 10.3% from current levels.
