This home improvement stock has lagged in 2026. Citi says it's time to buy

Citi is getting bullish on Lowe’s heading into next week’s earnings report. The bank upgraded the home improvement name to buy from neutral. It maintained its $285 price target on shares, suggesting 26% upside from Monday’s close. Lowe’s is scheduled to post first-quarter results May 20 before the bell. LSEG data shows that analysts overall expect the company’s bottom line grew only marginally to start the year. Citi is more optimistic. “LOW should beat 1Q street estimates and continue to outperform the industry … in 2026,” analyst Steven Zaccone said in a note. “The macro has risks of geopolitical tensions escalating, but we still believe the home improvement industry has bottomed and remain optimistic on the multi-year recovery.” Lowe’s stock has declined 6% since the beginning of this year, underperforming the overall market, as economic uncertainties tank consumer sentiment to record lows amid the Iran war . But while consumers are showing signs of tightening their purse strings , that doesn’t mean the company’s bottom line is likely to come under considerable pressure, according to Citi’s Zaccone. LOW YTD mountain LOW in 2026 He added that Lowe’s should see continued strength in same-store sales. “We recognize the housing backdrop remains weak, but our view is consistent the home improvement industry has bottomed as evidenced by 4 straight quarters of positive SSS for LOW,” Zaccone wrote. “LOW has outperformed [Home Depot] from a US [same store sales] perspective for 3 straight quarters – we see that continuing through the remainder of 2026.” To boot, the home improvement market is still expected to grow at a compound annual growth rate of 4.1% to $1.4 trillion by 2035, driven by a combination of economic factors, according to market research firm Global Market Insights. “The Iran conflict makes it difficult to predict [the] timing of a more favorable macro backdrop, but LOW provides an attractive ‘offensive’ option,” Zaccone wrote. “LOW provides a more direct exposure to a DIY-led recovery in the industry as well as smaller project activity,” Citi’s call falls in line with consensus on Wall Street. Of the 37 analysts covering Lowe’s, 22 have a buy or strong buy rating on the stock, LSEG data shows.