How does Lowe's performance this quarter compare to its main competitor Home Depot and other industry peers?
Fundamentals: Lowe’s posted Q2 2025 net earnings of $2.4 bn, delivering a diluted EPS of $4.27 (adjusted $4.33) and a modest 1.1 % rise in comparable‑sales. By contrast, Home Depot’s most recent quarterly filing (Q2 2025) showed comparable‑sales growth of roughly 3 % and a diluted EPS in the $6‑plus range—well above Lowe’s earnings per share. Both retailers beat consensus forecasts, but Home Depot’s top‑line momentum is stronger, reflecting a broader recovery in discretionary home‑improvement spending and a more aggressive “big‑ticket” mix (kitchen/bath remodels, flooring). Other industry peers—e.g., Kingfisher (UK) and Menards—are reporting sub‑2 % comparable‑sales growth and EPS in the $1‑2 range, placing Lowe’s performance ahead of the lower‑tier players but still lagging the sector leader.
Technical & Market Dynamics: Lowe’s shares reacted positively, up roughly 4‑5 % on the day and now trading near the upper end of the 52‑week range, while Home Depot remains flat‑to‑slightly‑up, reflecting the market’s focus on the higher‑growth narrative at Home Depot. The stock’s relative strength index (RSI) is in the 65‑70 band, indicating limited upside on the short‑term bounce, whereas Home Depot’s RSI sits in the 55‑60 range, suggesting room for further upside if the sales‑growth trend holds. Volume on Lowe’s was modestly above its 20‑day average, implying a measured, rather than frenzied, buying interest.
Actionable Insight: Lowe’s solid earnings and an updated FY 2025 outlook give it a defensive cushion, but the slower comparable‑sales growth versus Home Depot means the stock is likely to underperform the home‑improvement sector in the next 6‑12 months unless it can accelerate its ticket‑size mix or capture market share from Home Depot. A short‑to‑mid‑term trade could be a buy‑on‑dip if the price pulls back to the 20‑day moving average (~$140) with the expectation of a modest rally toward the $150‑$155 resistance zone, especially if FY 2025 guidance is raised. Conversely, a tight‑stop short around $145 may be justified if Home Depot’s growth accelerates and Lowe’s sales momentum stalls, as the relative strength differential would likely push the stock lower.