Home Depot and Lowe’s Hit 52-Week Lows—But Analysts Aren’t Giving Up

Key Points

• Home Depot and Lowe's shares hit 52-week lows last week as a frozen housing market and high rates curb home improvement spending.
• Despite beating earnings estimates, both companies face pressure from deferred renovations, tariff-driven material costs, and tempered or lowered guidance.
• Wall Street maintains a Moderate Buy consensus on both stocks, with price targets implying roughly 27% upside for Home Depot and 37% for Lowe's.

Surging home prices and an uptick in 30-year fixed-rate mortgages have kept the real estate market frozen while punishing homebuilders. But for home improvement stores, a frozen real estate market has not been the tailwind many expected from homeowners staying put.

Last week, Home Depot NYSE: HD and Lowe’s NYSE: LOW—the two companies that form a veritable duopoly in retail home improvement—saw their respective shares hit 52-week lows.

According to Marketplace, “high [home] prices and a moribund housing market have homeowners putting off improvement projects. Home Depot, Lowe’s, and their competitors are feeling the pinch.”

With Wall Street analysts pushing back the timeline for an expected rebound in home improvement spending, investors should continue to monitor HD and LOW for potential buy-low opportunities ahead of their prospective turnarounds.

Why the Housing Market Freeze Is Hurting Home Improvement Retailers

The stalled housing market is directly correlated with home improvement spending.

Sellers typically repair and update homes ahead of listing them, while buyers often commit sizable investments in renovations. But with 30-year mortgage rates at their highest level since November 2023, home improvement retailers are suffering from the real estate market’s lock-in effect.

Meanwhile, homeowners who are firmly entrenched with lower rates from the post-COVID-19 housing boom have tapered their spending. While consumers continue to make emergency repairs, they are increasingly deferring higher-cost discretionary renovations.

Inflation and higher interest rates are playing parts in that, too. Material costs have risen dramatically since President Trump’s tariff announcements. At the same time, homeowners—who typically finance home improvement projects with home equity lines of credit (HELOCs), credit cards, and personal loans—are not committing to higher borrowing costs as rates continue to climb.

Together, that suggests that the challenges the industry is facing are likely to linger, which has contributed to tempered outlooks. Grand View Research forecasts the U.S. home improvement market to undergo a tepid compound annual growth rate of 3% from 2026 to 2033.

But for Home Depot and Lowe’s, which together account for an estimated 80% of the home improvement retail market, their competitive moats remain in place, and Wall Street analysts are generally bullish on their performances over the next year.

Home Depot's Earnings Hold Up Despite Housing Market Weakness

Grand View Research’s report also highlighted how the U.S. home improvement market “is primarily driven by the increasing age of residential housing stock, rising homeowner expenditure on renovation and repair activities, and the growing preference for upgrading existing properties instead of relocating.”

For Home Depot, those serve as potential tailwinds despite the stalled housing market, inflation, and higher borrowing costs.

That is also something that has shown up on its books. After a Q2 earnings beat, the company has now exceeded Wall Street’s expectations for three consecutive quarters.

Q2 revenue of $47.86 billion also beat the consensus expectation of $47.24 billion, while marking a quarterly record high. Net income of $4.8 billion was the highest since Q2 2022, and marked a nearly 45% quarter-over-quarter increase.

But there were areas of concern, which likely contributed to the stock’s recent 52-week low. Free cash flow firm growth registered a negative 162.68% year over year (YOY). In the Home Depot’s Q2 earnings call, management noted how consumer uncertainty, housing affordability, and historically low housing turnover have placed pressure on the company’s top and bottom lines, while the impact of tariff refunds was largely offset by elevated fuel, energy, and product-input costs.

Still, Wall Street’s outlook remains positive. The stock has an analyst consensus Moderate Buy rating and a $376 price target that indicates potential upside of 27% from the current share price.

Short interest remains relatively low, with just 1.06% of the float currently sold short, marking a more than 19% month-over-month increase.

Lowe’s Is Being Punished for Tempered Guidance

The last time Lowe’s missed earnings was Q1 2019, and the company extended that streak with another strong report in Q2 2026, beating analyst estimates by 18 cents.

Revenue also climbed 8.3% year over year to $25.96 billion, marking the company’s strongest quarter for sales in four years, although it fell short of the $26.13 billion consensus estimate.

Still, the stock has suffered the same fate as Home Depot, as years of strong earnings and strong Q2 revenue growth were overshadowed by mixed guidance.

In its most recent earnings call, management lowered its full-year outlook to the bottom end of its prior range, calling for $92 billion in sales, which would be roughly flat YOY. Q3 earnings are expected to decline approximately 7% YOY, with the company citing ongoing home improvement weakness, weak residential construction, and higher transportation costs weighing on results.

Concerningly, Q2 free cash flow to the firm growth came in at negative 396% YOY despite posting its highest net income in a year, while net cash from operating activities of $3.66 billion marked a nearly 14% YOY decrease from $4.23 billion in Q2 2025.

But as with Home Depot, analysts see an opportunity in Lowe's. The stock carries an analyst consensus Moderate Buy rating and its $254 price target implying around 37% upside from current levels.

Short interest is also negligible, at just 1.68% of the float, up 2.42% from the prior month.