Home Depot vs. Lowe’s: One Payout Will Weather the Storm — Here’s Which

The Federal Reserve raised interest rates to 3.75%-4%, the first hike in three years, with unanimous FOMC support. Most members expect one more hike this year, with no cuts until 2028. Higher rates may negatively impact housing and home improvement stocks, as mortgage applications fell 19% year-over-year. Fed Chair Kevin Warsh emphasized inflation concerns, noting it remains elevated. Some stocks, like Rocket Companies and Home Depot, may benefit if rates drop and housing activity increases.

Home Depot reported strong professional sales and delivery capabilities, with 65% of parcel shipments delivered same or next day, and 55% of big-and-bulky products within two days. The company maintained full-year guidance, emphasizing everyday low pricing and expanding its share in the $700 billion professional market. AI is being used to improve customer tools and internal processes, with plans to invest in productivity improvements and return to a 2x debt-to-EBITDA ratio by mid-2027. Accordin

RH, Floor & Decor, Lowe's, Home Depot, and Williams-Sonoma reported Q2 earnings. RH revenue grew 2.6% YoY, beating estimates. Floor & Decor revenue rose 3% YoY, outperforming expectations. Lowe's revenue increased 8.3% YoY but missed EPS and revenue guidance. Home Depot revenue grew 5.7% YoY, beating estimates. Williams-Sonoma revenue rose 6.7% YoY, surpassing expectations. Shares of these companies have declined since earnings reports.

Lowe's (LOW) hit a 52-week low of $199, down 25% over the past year. Q2 sales grew 8% to $26B, but management cut full-year guidance, citing macroeconomic pressures. Analysts average a $253 price target. The stock's P/E ratios are 16 (forward) and 17 (trailing), with a 2.45% dividend yield.

Lowe's stock (NYSE: LOW) hit a 52-week low of $199, down 25% over the past year. Q2 sales grew 8% to $26B, but guidance was cut due to macroeconomic factors like low housing turnover, inflation, and tariffs. Analysts rate it a moderate buy with an average price target of $253. The dividend yield is 2.45%, and the stock has a P/E ratio of 16-17.

Walmart (WMT) expects $2.9B in tariff refunds, using them to lower prices, while Home Depot (HD) received $730M, applying $685M to reduce costs. Lowe's (LOW) plans to use its refund for shareholder returns. Walmart's CFO noted a 1.6% gross profit boost, and Home Depot's CFO reported a 0.3% margin increase.