Home Depot vs. Lowe’s: One Has Crushed the Market for 5 Years Running

Home Depot (NYSE:HD | HD Price Prediction) and Lowe’s (NYSE:LOW) reported fourth quarter earnings within 24 hours of each other. Both face the same housing headwinds yet execute different playbooks. The Pro customer is the battlefield, and each company just showed its hand.

HD Beat on Earnings. LOW Beat on Comparable Sales.

Home Depot delivered a clean quarter beat on the earnings line, posting adjusted diluted EPS of $2.72 against a $2.52 consensus estimate, a 7.94% beat.

Revenue came in at $38.20 billion, just ahead of the $38.12 billion estimate, though it declined year-over-year due to a calendar artifact: the prior-year Q4 spanned 14 weeks versus 13 this year. Comparable sales grew 0.4%, with average ticket rising 2.4% to $91.28.

Lowe’s missed on EPS, reporting $1.98 adjusted diluted EPS versus a $2.07 estimate, a 4.35% miss, but revenue came in at $20.58 billion, beating estimates by 1.14% and growing 10.95% year-over-year.

Comparable sales rose 1.3%, outpacing HD’s Q4 comp. Online sales grew 10.5%, and 12 of 15 regions delivered positive comp sales growth.

Scale vs. Speed: Two Different Pro Bets

Home Depot leaned on its SRS Distribution network, now spanning over 1,250 locations and added GMS to deepen specialty trade distribution. The SRS acquisition contributed 3.2% to total sales growth for fiscal 2025, though related amortization is compressing margins. HD’s adjusted operating margin guidance for fiscal 2026 sits at 12.8% to 13%.

Lowe’s took a bolder swing. The $8.8 billion Foundation Building Materials acquisition, closed in October 2025, pushed long-term debt to $37.50 billion and total assets to $53.45 billion. That is a significant balance sheet commitment for a company with a market cap of roughly $137 billion.

Lowe’s also completed the Artisan Design Group acquisition for approximately $1.31 billion, targeting new home construction. The Mylow AI advisor launch and relaunched Pro loyalty program signal acceleration rather than stability.

Housing Starts Are Improving

Housing starts reached 1,487 thousand annualized units in January 2026, up from a low of 1,272 thousand in October 2025. That recovery benefits both retailers.

Lowe’s FBM and ADG acquisitions position it to capture more of the new construction cycle directly. Home Depot’s scale means any broad housing recovery lifts transaction count, which declined 1.6% on a comparable basis in Q4. Watch whether transaction volumes stabilize in the first half of fiscal 2026 as the meaningful signal of a real turn.

Over the past five years, HD returned 20.51% while LOW returned 34.54% and the S&P 500 returned 66.75%. Both stocks have lagged the broader market, though Lowe’s has outpaced Home Depot in that span.

Why Lowe’s Stands Out

Home Depot is the safer name. Its 156th consecutive quarterly dividend, a 2.72% yield, and dominant market position appeal to income-oriented investors. The analyst community agrees: 18 Buy ratings, 15 Holds, and zero Sells, with a consensus target of $408.21.

Lowe’s has more upside potential. Its 7% to 9% total sales growth guidance for fiscal 2026 is meaningfully more aggressive than HD’s 2.5% to 4.5%. The FBM acquisition is a genuine structural move into Pro and new construction, not just a distribution bolt-on.

Watch whether Lowe’s can absorb acquisition costs and expand operating margins toward the 11.6% to 11.8% adjusted target it set for fiscal 2026. If it does, the valuation gap narrows in Lowe’s favor. If integration stumbles, the EPS miss becomes a pattern rather than a one-quarter disruption.