Home Depot and Lowe’s are entering the latter stages of the 2026 second-quarter earnings season while facing similar housing and consumer-spending pressures. Home Depot has maintained a more stable estimates outlook, while Lowe’s has experienced downward revisions despite stronger reported revenue growth. Valuation also favors Lowe’s, but weaker earnings momentum and a Zacks Rank of #4 suggest Home Depot currently has the stronger near-term setup.

Home Depot Maintains More Stable Earnings Momentum

Home Depot’s latest results reflected a challenging environment for large home-improvement projects. Sales increased 4.8% year over year to $41.8 billion, while adjusted earnings per share declined approximately 3.7% to $3.43. Comparable sales increased 0.6%, supported by a 2.2% increase in the comparable average ticket, although transactions declined 1.3%.

The combination suggests consumers remain willing to spend when they do make purchases, but transaction volumes continue to reflect caution. Higher ticket sizes are helping offset weaker traffic, an important dynamic as housing affordability and low turnover continue to constrain demand for major remodeling projects.

From an earnings-expectations perspective, Home Depot appears to have the advantage. Sales and EPS revisions have remained largely stable in recent months, with the company currently expected to deliver roughly 5% revenue growth and 0.6% earnings growth year over year.

Lowe’s Delivers Faster Revenue Growth but Faces More Pressure

Lowe’s reported stronger headline revenue growth, with sales rising 10.3% to $23.1 billion. However, acquisitions played an important role in that increase. Adjusted EPS rose 3.8% to $3.03, while comparable sales increased 0.6%.

The underlying customer trends were mixed. Comparable average ticket increased 1.5%, while transactions declined 0.9%. Online sales were a notable bright spot, increasing 15.5% year over year and highlighting the company’s continued progress in digital channels.

Nevertheless, the estimates picture has weakened. Analysts have reduced Lowe’s EPS expectations by 2.1% and sales estimates by 0.6% in recent months. Current forecasts call for approximately 9% revenue growth but a 2.5% decline in earnings. That combination could make the stock more vulnerable if upcoming results or guidance fail to provide evidence of improving profitability.

Valuation Gives Lowe’s an Advantage

Lowe’s has a clear valuation advantage over Home Depot. The stock trades at approximately 16.9 times forward 12-month earnings, compared with 21.7 times for Home Depot. Both multiples remain below their respective five-year historical medians, although Home Depot has traditionally commanded the higher valuation.

The lower multiple makes Lowe’s potentially more attractive from a valuation perspective, particularly if earnings momentum improves. However, a cheaper valuation does not necessarily provide the stronger near-term setup. Investors also need to consider estimate revisions, operating trends and market expectations.

Market Outlook

Home Depot appears to hold the stronger near-term position based on the available earnings data, primarily because its estimates have remained more stable while Lowe’s faces downward revisions and a weaker earnings outlook. Lowe’s lower valuation and strong online sales growth provide potential upside if housing activity and discretionary remodeling demand improve, but investors may require clearer evidence of an earnings recovery before assigning the stock a higher multiple. Going forward, housing turnover, consumer affordability, transaction trends, average ticket growth and management guidance will remain critical indicators for determining whether Lowe’s can close the performance gap or whether Home Depot’s more stable earnings trajectory continues to command a premium.