With Steady Retail Prices and Lower Rates Ahead, Lowe's Could Surge in 2026
This big retailer may surprise many investors in the year ahead.
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While the consumer is starting to wonder if the economy is going into the tank, they continue to spend money.
Just look at recent earnings from retailers like Walmart (WMT) , Urban Outfitters (URBN) and Abercrombie & Fitch (ANF) , which said that their shopper is robust and buying goods at discount and regular prices. This means margins for retail shops are solid and prior price increases are sticking. We may not have "too high" of an inflation rate any longer and some costs are coming down, but retail prices are not. That's a positive formula for retail companies to grow earnings.
Lowe's (LOW) is an interesting case. The company reported good numbers throughout 2025 but its stock is not reflecting its own optimism. The company is forecasting good growth for 2026 and beyond, and will only be helped by lower interest rates.
Why is that? Consumers buy more products from retail when rates are low (think: credit card usage), large home improvement projects get started as financing is much easier and encourages the consumer to tap into their home equity (for low-cost loans).
We have seen a trend in rates that has certainly moved lower, and that will help names like Lowe's execute their plans and provide their shopper with what they need. Further, product is available to stock shelves, something this retailer and others were challenged by during the post-COVID period. The stock has not risen much this year but it might be due for an unexpected rise in the year ahead. Many analysts do not see too much upside for Lowe's.
As for the chart, the weekly version shown here is mildly bullish, the old high comes in around the $272 area so there is room for the stock to move. A 10% move up from current levels ($242) gets you to those old highs. Volume trends are positive, the stochastics (momentum) is bullish and the MACD weekly is on a strong buy signal since November.
If the consumer spends and rates head lower, housing is going to improve magnificently and, given the position of Lowe's, we think this stock can make it to the $300 to $310 area by the end of 2026, a solid 24% gain.
