Citi Sees 26% Upside for Lowe's Ahead of Earnings

Citi has upgraded Lowe's stock to 'buy,' maintaining a $285 price target and anticipating a 26% increase from its recent closing price. This upgrade precedes Lowe's first-quarter earnings report, scheduled for May 20. While broader analyst consensus suggests minimal profit growth for the company at the start of 2026, Citi's analyst Steven Zaccone expressed greater optimism.

Zaccone predicts Lowe's will surpass first-quarter street estimates and continue to outperform the home improvement industry throughout 2026. He views the current macroeconomic risks, including escalating geopolitical tensions, but remains confident that the industry has hit its lowest point and is poised for a multi-year recovery. Despite a 6% decline in Lowe's stock year-to-date and weakened consumer sentiment, Citi believes the company's financial performance will remain strong.

Lowe's has demonstrated resilience with four consecutive quarters of positive same-store sales, outperforming Home Depot in U.S. same-store sales for three straight quarters. This trend is expected to continue through the remainder of 2026. The broader home improvement market is forecast to grow at a compound annual growth rate of 4.1% by 2035, reaching $1.4 trillion. Citi sees Lowe's as an attractive 'offensive' option, offering direct exposure to a DIY-led recovery and smaller project activity, even amidst uncertain global economic conditions.