Lowe's Trades at a 26% Discount to Home Depot

The home improvement industry has been facing challenges due to macroeconomic headwinds, including elevated interest rates and above-normal inflation. As a result, both Home Depot (HD) and Lowe's (LOW) have underperformed the market in recent years.

Lowe's is set to report its financial results for the fiscal 2026 second quarter on August 19. Investors should pay attention to same-store sales growth, which increased 0.6% in Q1. Trends for both DIY and professional customer cohorts will also be insightful.

The leadership team expects pro demand to outpace DIY. Lowe's acquired Foundation Building Materials last October and Artisan Design Group in June 2025. Commentary on cost synergies and integration progress will indicate if these significant billion-dollar capital allocation decisions are bearing fruit.

Lowe's is a better stock to buy now than Home Depot due to its lower valuation. The former trades at a forward price-to-earnings ratio of 16.5, while the latter can be bought at 22.3 multiple. This means Lowe's is offered at a 26% discount compared to its larger rival.