Home improvement retailers like Home Depot and Lowe's are navigating persistent challenges from high interest rates and a sluggish housing market. However, Wall Street analysts believe Lowe's is well-positioned to benefit from the aging U.S. housing stock and growing demand for professional renovations.

The average age of American homes now exceeds 41 years, and properties built during the mid-2000s housing boom are approaching the 20-year mark, a typical period for major overhauls. Analysts from UBS note that essential repairs—such as roof replacements and updates to aging HVAC systems—cannot be postponed indefinitely. This is expected to generate an additional $1 to $2 billion in annual, non-discretionary spending for the home improvement market.

Despite this structural demand, Lowe's recent performance has been relatively subdued. The company's first-quarter fiscal report showed comparable sales growth of just 0.6%, falling short of market expectations for a more robust growth narrative. A bright spot, however, was the professional contractor business. Revenue from this segment, which has grown from less than 20% of total sales in 2019 to approximately 30%, continued to outperform the do-it-yourself (DIY) segment this quarter.

Lowe's is accelerating its strategic shift toward the professional contractor market through a series of acquisitions. The company has invested $8.8 billion to acquire Foundation Building Materials and Artisan Design Group, enhancing its capabilities in specialty building materials distribution and installation services. Lowe's has reaffirmed its fiscal 2026 guidance for comparable sales growth in the range of 0% to 2%, with expectations that the professional segment will continue to outpace the DIY business.