NEW YORK, July 23, 2026 – Lowe's Companies (NYSE:LOW) saw its stock decline 1.5% to $201.33 in late-afternoon trading on Thursday, as rising mortgage rates continued to weigh on the housing sector. The decline was milder than that of its larger rival Home Depot (NYSE:HD), which fell 2.0% to $324.76.
The divergence in stock performance highlights a growing valuation gap between the two home improvement retailers. Lowe's currently trades at 16.1 times the midpoint of its adjusted earnings per share guidance for fiscal 2026, while Home Depot commands a multiple of 21.7. This 26% discount persists even though Lowe's delivered a stronger first-quarter adjusted EPS performance.
In the first quarter, Lowe's reported a 3.8% increase in adjusted earnings per share year-over-year, while Home Depot saw a 3.7% decline. Both companies posted comparable-sales growth of 0.6% during the period. The 7.5 percentage point difference in EPS growth underscores Lowe's relative operational strength.
Home Depot's larger scale likely supports its premium valuation. The company generated quarterly sales of $41.8 billion, nearly double Lowe's $23.1 billion. However, Lowe's demonstrated robust performance in key areas, with online sales surging 15.5% and continued growth in the Pro segment, appliances, and home services.
The broader housing market faces increasing headwinds. The average 30-year fixed mortgage rate climbed to 6.58%, rising 15 basis points over the past three weeks, according to Freddie Mac. Another industry metric showed a rate of 6.69% last week. Higher borrowing costs are dampening home sales activity, with existing-home sales falling 2.4% in June to an annual pace of 4.09 million, and pending home contracts declining 5.4%. The median home resale price reached an all-time high of $440,600.
Executives at both companies acknowledged the challenging environment. Lowe's CEO Marvin Ellison stated the business maintained its focus "in spite of a challenging housing macro," while Home Depot CEO Ted Decker described demand as "relatively similar to what we saw throughout fiscal 2025."
Investors are closely watching the upcoming earnings reports. Home Depot is scheduled to release its second-quarter results on August 18, followed by Lowe's on August 19. The reports will provide further insight into whether the EPS growth differential can be sustained, which would keep the spotlight on the valuation gap.
Risks remain, including the potential for rising borrowing costs to further reduce consumer spending and slow home sales. Additionally, Lowe's adjusted results excluded $96 million in acquisition-related costs from the first quarter. Trading on the NYSE remains active, with the main session closing at 16:00 EDT. After-hours comparisons are based on prices lagging by at least 15 minutes.
