LOW · NYSE · Consumer Discretionary · Home Improvement Retail

Lowe's cleared a low bar and cut its guide — the next month is a valuation-and-macro trade, not a growth story

In short

Q2 delivered an adjusted beat on a light revenue miss, then management trimmed the full-year guide to the bottom of every range on persistent DIY softness. The stock reversed a premarket drop to close up 2%, and at 18.6× earnings it is cheap and 87.9% idiosyncratic. But with no company catalyst until November and the broad market sitting in the high-volatility regime that has historically been LOW's worst, the next 10–30 days hinge on the September 16 FOMC and the housing tape, not on the business.

Research desk

2026-08-20 · Data as of 19 Aug 2026 close · Horizon 10–30 days

Mixed · rangebound

Close 19 Aug 2026

$220.00

30 day

▲ 8.1%

Year to date

▼ 8.8%

From 52W high

▼ 24.9%

Ann. volatility

28.6%

Regime as of

19 Aug

Market cap

$123.4B

52W range

$199–$293

TTM revenue

$90.4B

Rev growth

+8.3%

P/S TTM

1.36

P/E TTM

18.6

Report date

20 Aug 2026

TTM EPS

$11.83

EV/EBITDA

13.4×^e

Comp sales

+0.2%

Online sales

+15.7%

Net cash

−$41.8B^e

Employees

276,000

Next catalyst

16 Sep · FOMC

LOW · 30-day price

LOW · 1-year price

00Executive summary

Dimension	Finding	Signal
Price action	+8% off the 19 Jul low but still −25% from the Feb high and −14% YoY; a recovery inside a downtrend	Mixed
Revenue growth	+8.3% total sales but comps only +0.2% — growth is acquired (FBM, ADG), the core is flat	Mixed
Profitability	Operating margin 13.67%, down 81 bps YoY; gross margin down 77 bps on mix and acquisition drag	Bearish
Valuation vs peers	18.6× P/E and 1.36× sales — the cheapest large-cap in the group, well under Home Depot's 24×	Bullish
Platform KPIs	Online +15.7%, Pro and Home Services strong; a 5th straight quarter of positive comps	Bullish
Balance sheet	Investment-grade, covers the $0.67B/qtr dividend; but negative book equity and net debt near 3× EBITDA	Mixed
Regime state	Quiet Drift (Q4): Persistency +0.21, Volatility −0.17, held 18 sessions — historically the friendliest regime to hold. As of 19 Aug 2026	Neutral
Driver exposure	87.9% idiosyncratic; near-zero market-factor correlation; the one systematic tie is an inverse link to the primary sector driver	Neutral
Key risk in window	The broad market sits in Volatile Trend — historically LOW's worst backdrop (US-market regime Sharpe −1.29)	Bearish
Catalysts in window	No company event until ~November; the 16 Sep FOMC decision and housing data set the tape	Mixed
Overall view (10–30 days) — cheap, idiosyncratic and de-risked into a favourable own-regime, but organically stalled and hostage to a macro backdrop that has not been kind to it		Mixed

Signal reflects the 10–30 day window only. Row tint matches the badge. ^e marks a derived figure.

Lowe's did the hard part — it cleared a low bar and got the guidance cut out of the way, and the stock rewarded it with a 2% close. What it did not do is give the next month a reason to re-rate: comps are flat, margins are narrowing, and the only scheduled catalysts before the Q3 print are macro. The set-up is a cheap, low-beta name marking time in its own calm regime while its sector trades in the turbulent one.

01Investment thesis

Each case states what would have to happen inside the next 10–30 days for it to play out. This section argues; the verdict is section 02.

Bull case

The bad news is now public. The guide was cut to the bottom of every range on 19 Aug; with the reset behind it, the bar for the next month is low and hard to disappoint.

Cheap and reset. 18.6× P/E is near a 5-year low and a clear discount to Home Depot's 24×; the −25% drawdown from February already prices a lot of pessimism.

Own regime is favourable. LOW sits in Quiet Drift (Persistency +0.21, Volatility −0.17) and has held it 18 sessions — historically the most comfortable regime to carry long exposure.

It marches to its own drummer. 87.9% of daily variance is company-specific and the market-factor correlation is ~0, so a broad-market wobble need not drag it down.

The Pro/online engine works. Online +15.7% and Pro strength drove a 5th straight positive comp; FBM and ADG add Pro distribution scale that DIY peers lack.

Rate relief is optionality. A dovish 16 Sep FOMC or a soft inflation print would re-rate housing-levered names fast, and LOW is among the most geared to that.

Neutral case

Rangebound until November. With no company catalyst before the Q3 print, the stock likely oscillates in a ~$205–$235 band as macro data sets the tone.

A clear, low bar. The FY guide is now "flat comps" and ~$12.25 adjusted EPS; there is little to beat and little new to learn before Q3.

Fairly valued, not screaming. 18.6× is cheap versus HD but ordinary for a retailer with flat comps; a real re-rating needs a demand catalyst, not just a low multiple.

Regime cross-currents cancel. A favourable own-regime and an unfavourable market regime roughly offset, which is what a rangebound month looks like.

Dividend pays you to wait. A ~2.2% yield and beta 0.85 make holding through a quiet stretch cheap in opportunity cost.

Bear case

The market is in LOW's worst regime. US market, S&P 500 and Global are all in Volatile Trend/Chop — historically LOW's weakest backdrop (US-market Volatile Trend: −34% annualised, Sharpe −1.29).

The guide cut signals real softening. Trimming to the low end on "persistent DIY softness" and a "frozen housing market" is a demand statement; a hawkish FOMC would deepen it.

Home Depot is out-executing. HD comped +1.7% to LOW's +0.2% and reaffirmed guidance while LOW cut — a relative-share and relative-story problem.

Margins are eroding. Gross −77 bps and operating −81 bps YoY; the lower-margin FBM/ADG mix and $96M of acquisition expense keep pressure on.

Growth is bought, not earned. +8.3% sales on +0.2% comps means the core is flat-to-down once acquisitions are stripped out.

The chart and the insiders lean down. Still −25% from the high and −14% YoY; insiders sold 7:1 over the year and the CEO sold near the top in January.

The argument is not about the quarter — it is whether a cheap, idiosyncratic name can hold its footing while its whole sector trades in the regime that has historically hurt it most.

02Composite assessment

With the beat and the low-end guide already digested, LOW's next month is a valuation-and-macro trade: cheap at 18.6× and calm in its own Quiet Drift regime, but with the market in the Volatile Trend backdrop that has historically been its worst — the 16 September FOMC is the swing factor, and a dovish rate signal is what flips it from range to breakout.

2.1 — Dimension scores

Revenue growth

5.0

+8.3% total but +0.2% comps — growth is acquired (FBM/ADG), core flat

Profitability

7.0

13.7% operating margin, −81 bps YoY, still sector-strong

Valuation

7.5

18.6× P/E vs HD 24×; near a 5-year-low multiple

Earnings quality

6.0

Adj EPS $4.40 beat $4.24, but GAAP flat and $96M acquisition add-backs

Balance sheet

6.0

Investment-grade, covers the dividend; negative book equity, net debt ~3× EBITDA

Competitive position

6.0

#2 to HD; out-comped +1.7% vs +0.2%; Pro pivot underway

Structural risk

4.5

Frozen housing and soft DIY; demand is rate-dependent

Regime alignment

5.5

Own regime favourable, but US-market Volatile Trend is LOW's worst backdrop

Driver independence

8.5

87.9% idiosyncratic; market beta ~0

Composite

6.2

Growth 25 · Valuation 20 · Profitability 18 · Execution 12 · Risk 10 · Regime 10 · Driver independence 5

Green at 8 and above, yellow 6–8, red below 6. The composite row states its weighting.

2.2 — Where it wins and where it loses

Wins

Cheapest large-cap in the group. 18.6× P/E and 1.36× sales, versus HD at 24× and 2.0× and its own ~20–22× history.

Idiosyncratic ballast. 87.9% of variance is company-specific and market beta is ~0, so a broad selloff need not carry it down with the tape.

Favourable own-regime. Quiet Drift (P +0.21, V −0.17), held 18 sessions — the friendliest quadrant to hold, plus a ~2.2% dividend to wait.

Loses

Organic growth has stalled. Comps +0.2% and the FY guide cut to flat; strip the acquisitions and the core is not growing.

Margins are compressing. Gross −77 bps and operating −81 bps YoY on mix and the lower-margin distribution acquisitions.

Wrong market regime, out-executed by HD. The market is in Volatile Trend (LOW's worst, Sharpe −1.29) and HD comped +1.7% while reaffirming its guide.

03Risk factors

Ordered by what can bite inside the next 10–30 days, not by ultimate severity. Structural risks that cannot resolve inside the window are marked as context.

Live in the window

The market's regime is LOW's worst. US market, S&P 500 and Global proxies are all in high-volatility Volatile Trend/Chop. In that US-market state LOW has historically returned −34% annualised at a Sharpe of −1.29 — its weakest of the four quadrants. A risk-off tape over the next month would hit it disproportionately.

The 16 September FOMC and the CPI ahead of it. Management itself blamed a "frozen housing market"; a hawkish hold or a hot inflation print would push mortgage rates up and deepen exactly that overhang. Rate-sensitive big-ticket demand reprices quickly.

Post-print estimate cuts. Analysts were already trimming into the quarter (JPM $279→$252, Citi $285→$267, Wells Fargo $255→$245). A low-end guide can trigger a second wave of target reductions with no new news.

Structural context

DIY discretionary weakness. A multi-quarter theme in soft big-ticket categories. It caps the upside on comps but will not resolve inside a month — it is the backdrop, not the trigger.

Housing turnover. Existing-home-sales stagnation suppresses remodel demand and stays structural until rates ease materially; a single FOMC rarely thaws it.

Acquisition margin dilution and HD share. FBM and ADG are lower-margin distribution, and HD's Pro scale lead is a multi-year dynamic — both weigh on the story but move slowly.

3.1 — Competitive, macro and financial

Risk	Category	Mechanism	Bites in window?
Unfavourable market regime	Macro	US-market Volatile Trend has coincided with LOW's weakest historical returns (Sharpe −1.29)	Yes
16 Sep FOMC / Aug CPI	Macro	A rate surprise reprices mortgage-sensitive, big-ticket remodel demand	Yes
Post-print estimate cuts	Company	Low-end guide prompts a second round of analyst target trims	Likely
DIY discretionary softness	Competitive	Weak big-ticket demand holds comps near zero	Structural
Frozen housing market	Macro	Low existing-home turnover suppresses project spend	Structural
Margin dilution (FBM/ADG)	Financial	Lower-margin distribution mix plus $96M acquisition expense	Structural

The risks that actually move the stock in the next month are not on the income statement — they are on the macro calendar. LOW's demand is rate-geared, its sector is trading in its worst regime, and the one scheduled event with the power to shift either is the 16 September Fed decision.

04Earnings and guidance signals

4.1 — Earnings history

Quarter	Report date	Revenue	vs est.	EPS (dil.)	vs est.	Reaction
Q2 FY26	19 Aug 2026	$25.96B	−0.8%	$4.27	+3.8%	+2.0%
Q1 FY26	20 May 2026	$23.08B	—	$2.90	−2.0%	+1.2%
Q4 FY25	25 Feb 2026	$20.59B	—	$1.78	−2.0%	−5.6%
Q3 FY25	19 Nov 2025	$20.81B	—	$2.88	−2.9%	+4.0%
Q2 FY25	20 Aug 2025	$23.96B	—	$4.27	−2.1%	+0.3%

EPS is GAAP diluted; the vs-est column is the surprise against adjusted-EPS consensus (Q2 FY26 adjusted was $4.40 vs ~$4.24). Reaction is the report-day close-to-close move from LOW price history. Minus signs are − (U+2212).

4.2 — Beat consistency

Company	Rev beat rate	EPS beat rate	Guidance
LOW	~25%	~40%	Cut to low end
Home Depot	~75%	~75%	Reaffirmed

Beat rates approximate, last ~8 quarters. LOW's prints land within a few cents of consensus; the stock's move is set by comps and guidance, not the EPS line.

4.3 — Forward guidance (FY26)

Item	Value	Comment
Next report (Q3 FY26)	~Nov 2026	Outside the 10–30 day window
Total sales	$92.0B	Narrowed to bottom of $92–94B
Comparable sales	Flat	From flat to +2%
Adjusted EPS	~$12.25	Bottom of $12.25–12.75
Operating margin	11.2%	Bottom of 11.2–11.4%

The next earnings print lands roughly three months out — well outside this window — and the guide has just been reset to a floor. That removes the company as a near-term catalyst in either direction and hands the next month to the macro calendar.

05Analyst outlook

Period	Source	View	Key point
Aug 2026	Consensus (34 analysts)	Buy	Average target $260.68 (+18%); 23 Buy / 9 Hold / 1 Sell
13 Aug 2026	Citigroup	Buy	Cut target $285→$267 into the print on DIY caution
13 Aug 2026	Piper Sandler	Overweight	$274; Pro and online seen offsetting soft DIY
11 Aug 2026	Wells Fargo	Overweight	Trimmed $255→$245; comps expected soft
31 Jul 2026	JP Morgan	Overweight	Cut $279→$252 on demand caution
12 Aug 2026	RBC Capital	Sector Perform	$231; balanced risk/reward at current levels

The Street stays majority-Buy but was cutting targets into the quarter — every action shown is a trim. These are pre-print; post-19 Aug revisions were still landing at the data cut-off.

06Insider and board activity

Date	Insider	Transaction	Shares	Price	Value	Signal read
18 Jun 2026	M. Vagell, EVP Supply Chain	Open-market sale	2,500	$223.83	$0.56M	Routine trim
9 Jan 2026	M. Ellison, Chairman & CEO	Open-market sale	18,000	$261.17	$4.70M	Sold near the highs
Trailing 12 months	All insiders (aggregate)	7 sells vs 1 buy	—	—	—	Net selling, no open-market buying

Source: Form 4 filings. Executive sales are largely pre-scheduled (10b5-1) and modest against holdings; the CEO retains ~231,000 shares. The absence of any open-market buying is a mild negative, not a red flag, and none of it falls inside the 10–30 day window.

07Recent news and catalysts

Date	Source	Development	In window?
19 Aug 2026	Lowe's	Q2 FY26: sales $26.0B (+8.3%), comps +0.2%, adjusted EPS $4.40; FY guide cut to the low end	Just occurred
19 Aug 2026	CNBC / Qz	Stock reverses a ~2% premarket drop to close +2% as the low bar is cleared	Just occurred
18 Aug 2026	Home Depot	HD Q2: comps +1.7%, guidance reaffirmed — a softer read-through than LOW's cut	Just occurred
Jul–Aug 2026	JPM / Citi / Wells Fargo	Analysts trim price targets into the print on DIY and housing caution	No
9 Oct 2025	Lowe's	Completed ~$8.8B acquisition of Foundation Building Materials (Pro interior-products distribution)	No
Aug 2025	Lowe's	Acquired Artisan Design Group (ADG) — homebuilder design and installation services	No
16 Sep 2026	Federal Reserve	FOMC decision, projections and dot plot — the rate read for housing-levered demand	Yes
late Aug–Sep 2026	Census / NAR / Conf. Board	Housing starts, existing-home sales and consumer-confidence releases	Yes

Newest first. The final column states whether the event falls inside the next 10–30 days.

Catalysts inside the window

The only scheduled catalysts in the next 10–30 days are macro. The 16 September FOMC decision and dot plot, plus the late-August/September housing and confidence data, set the tape. With no company event until the Q3 print (~November), a dovish rate signal is the clearest path to a re-rating in a housing-levered name; a hawkish one deepens the "frozen housing" overhang management flagged.

08Ratings and price targets · peer frame

Company	Price	Market cap	TTM revenue	P/S TTM	Rev growth	Source view	News sentiment
LOW	$220.00	$123.4B	$90.4B	1.36	+8.3%	Mixed	Cautious
Home Depot	$344.30	$343.3B	$169.2B	2.03	+5.7%	Bullish	Neutral
Floor & Decor	$57.42	$6.1B	$4.71B	1.30	+2.4%	Neutral	Neutral
Tractor Supply	$35.44	$18.5B	$15.75B	1.17	+2.0%	Neutral	Cautious
Peer median	—	$18.5B	$15.75B	1.30	+2.4%	—	—

Home Depot is the size peer; Floor & Decor and Tractor Supply are smaller specialty/hardline comps. P/S is market cap ÷ TTM revenue (derived). Revenue growth is latest-quarter YoY. LOW's headline +8.3% is acquisition-boosted; on comparable sales it is +0.2%.

8.5Analyst price targets · multiple sources

Recent analyst actions

Analyst / source	Current target	Previous	Date	Implied return	Rating	Direction
Citigroup	$267	$285	13 Aug 2026	+21.4%	Buy	▼ Lowered
Piper Sandler	$274	$276	13 Aug 2026	+24.5%	Overweight	▼ Lowered
RBC Capital	$231	$232	12 Aug 2026	+5.0%	Sector Perform	▼ Lowered
Wells Fargo	$245	$255	11 Aug 2026	+11.4%	Overweight	▼ Lowered
JP Morgan	$252	$279	31 Jul 2026	+14.5%	Overweight	▼ Lowered
Morgan Stanley	$255	$250	Aug 2026	+15.9%	Overweight	▲ Raised

Newest first. Implied return is against the $220.00 close. Direction is ▲ raised, ► maintained, ▼ lowered — the tape into the print was near-universal trimming, ratings held.

Metric	Value
Last close	$220.00
Consensus target	$260.68
Median target	$262.00
High target	$300.00
Low target	$202.00
Implied upside to consensus	+18.5%
Implied downside to low	−8.2%
Analysts contributing	34

Target range vs last close

09Fundamental analysis and peer comparison

9.A — Quarterly earnings trend

Quarter	Revenue	QoQ Δ	YoY Δ	EPS (dil.)	Gross margin	Adj. EBITDA	Margin	vs est.	Reaction
Q4 FY24	$18,554M	−8.0%	—	$2.00	32.86%	$2,238M^e	12.1%	Miss	—
Q1 FY25	$20,930M	+12.8%	−2.0%	$2.92	33.38%	$2,994M^e	14.3%	Miss	—
Q2 FY25	$23,959M	+14.5%	+1.6%	$4.27	33.81%	$3,969M^e	16.6%	Miss	+0.3%
Q3 FY25	$20,813M	−13.1%	+3.2%	$2.88	34.19%	$3,090M^e	14.8%	Miss	+4.0%
Q4 FY25	$20,585M	−1.1%	+11.0%	$1.78	32.46%	$2,261M^e	11.0%	Miss	−5.6%
Q1 FY26	$23,078M	+12.1%	+10.3%	$2.90	32.68%	$3,074M^e	13.3%	Miss	+1.2%
Q2 FY26	$25,956M	+12.5%	+8.3%	$4.27	33.04%	$4,069M^e	15.7%	Beat	+2.0%
FY26 guide	$92.0B	—	—	~$12.25	—	—	11.2%	Full-year	—

Revenue and margins from quarterly statements; Adjusted EBITDA is operating income plus estimated depreciation/amortisation (^e derived). "vs est." is against adjusted-EPS consensus; Q2 FY26 adjusted EPS was $4.40. Guide row grey. Strong Q2/Q3 seasonality drives the margin swing.

Revenue $M · own band

Operating margin % · own band

Two series sharing an x axis but not a scale get two stacked bands, never one. Revenue steps up on the FBM/ADG acquisitions; operating margin swings on retail seasonality and mix.

9.1 — Liquidity

Metric	1 May 2026	30 Jan 2026	31 Oct 2025	Target
Current ratio	1.09	1.08	1.04	1.5–3.0 healthy
Quick ratio	0.18	0.19	0.16	≥1.0 healthy
Cash ratio	0.04	0.05	0.03	Industry dependent

Peer comparison (most recent)	Current ratio	Net cash position	Liquidity status
LOW	1.09	Net debt	Thin, normal for big-box retail
Home Depot	~1.1	Net debt	Comparable model

Column headers are actual reporting dates. Big-box retail runs low quick ratios by design — inventory is the working-capital engine and turns quickly. The Q2 FY26 balance sheet (31 Jul 2026) was not yet in the database; the most recent reported is 1 May 2026.

9.2 — Leverage and solvency

Metric	1 May 2026	30 Jan 2026	31 Oct 2025	Target
Debt-to-equity	n/m	n/m	n/m	Negative book equity (buybacks)
Debt-to-assets	0.77	0.83	0.84	<0.5 conservative
Interest coverage	~7.4×^e	~7×^e	~7×^e	>2.5 healthy
Net debt / EBITDA	~3.4×^e	~3.5×^e	~3.6×^e	<3.5 investment-grade

Debt-to-equity is not meaningful: like Home Depot, LOW has run book equity negative for years through buybacks, so it is not a distress signal. Coverage and leverage are the relevant gauges — both sit comfortably in investment-grade territory. Total debt of $42.6B includes lease obligations (^e ratios derived).

9.3 — Profitability

Metric	Q2 FY26	TTM	Q2 FY25	FY2025	FY2024	Trend
Gross margin	33.04%	33.0%	33.81%	33.0%	33.3%	▼
Operating margin	13.67%	11.4%	14.48%	11.9%	12.5%	▼
Net margin	9.24%	7.3%	9.98%	7.7%	8.3%	▼
Adj. EBITDA margin	15.7%^e	13.6%^e	16.6%^e	14.3%^e	14.9%^e	▼
Return on assets	—	12.1%^e	—	12.3%^e	12.9%^e	→
Return on equity	n/m	n/m	n/m	n/m	n/m	→
DuPont (NPM × AT × EM)	n/m	n/m	n/m	n/m	n/m	→

Peer comparison	Gross	Op margin	Net margin	Adj. EBITDA	ROE	Rank
LOW	33.0%	11.4%	7.3%	13.6%^e	n/m	2 of 4
Home Depot	33.4%^e	13.5%^e	8.4%	15.0%^e	high	1 of 4
Tractor Supply	36%^e	10%^e	6.4%	11%^e	high	3 of 4
Floor & Decor	43%^e	7%^e	4.9%	12%^e	~9%	4 of 4
Peer median	36%	10%	6.4%	12%	—	—

Rank on net margin. LOW's absolute profitability is second only to Home Depot, but every LOW line is compressing YoY. Peer gross/operating margins marked ^e are estimates from the latest reported quarter; ROE is not meaningful where book equity is negative.

9.4 — Efficiency, growth and platform

Metric	Current / TTM	Prior year
Asset turnover	1.65^e	1.55^e
EPS growth (adj, YoY)	+3.8%	+1.6%
Dividend yield	2.2%	2.0%

Platform metric	Q2 FY26	YoY
Comparable sales	+0.2%	5th straight positive quarter
Online sales	+15.7%	Accelerating
Store count	1,761	196M sq ft, ~flat

Company	Asset turnover	Rev / employee	Employees	EPS growth	Div yield	Rank
LOW	1.65^e	$327K^e	276,000	+3.8%	2.2%	2 of 2
Home Depot	~1.0^e	$360K^e	~470,000	+4.6%	2.7%	1 of 2

9.5 — Valuation multiples

Metric	Current	Comment
P/E TTM	18.6	Below HD 24× and 5-yr avg ~20–22×
Price / book	n/m	Negative equity (buybacks)
Price / sales TTM	1.36	Below HD 2.03
EV / EBITDA	13.4×^e	Below HD ~17×^e
PEG	~2.5^e	Elevated on low growth

Peer	P/S TTM	P/E TTM	PEG
LOW	1.36	18.6	~2.5^e
Home Depot	2.03	24.1	~3.5^e
Floor & Decor	1.30	26.8	~2.0^e
Tractor Supply	1.17	18.5	~2.5^e
Peer median	1.30	24.1	~2.5

On every multiple that matters LOW is the cheapest large-cap in its group — 18.6× earnings versus Home Depot's 24× — and that discount is the report's clearest source of downside support. But cheapness is a floor, not a spring: with comps flat and growth acquired, a re-rating needs a demand catalyst, and none is scheduled inside the window. Over the next 10–30 days the valuation limits how far the stock falls more than it dictates how far it rises.

10Regime analysis · Persistency and Volatility

+0.21

Persistency, placing LOW in Quiet Drift — a mildly-trending, low-volatility tape

290 daily observations, 25 Jun 2025 – 19 Aug 2026. As of 19 Aug 2026 — 1 trading day behind the report date.

10.1 — Regime trace

LOW — regime trace · Persistency vs Volatility (290 daily points, oldest faint → newest bright). Persistency on x, Volatility on y. Q1 volatile trend, Q2 volatile chop, Q3 quiet range, Q4 quiet drift. Source: Trader workbook, Individual regimes daily. As of 19 Aug 2026 — 1 trading day behind the report date.

10.2 — Current regime read

Measure	Current	Mean	Std dev	Min	Max	Percentile	Interpretation
Persistency	0.212	0.240	0.043	0.115	0.335	18.3	Mildly Trending — positive across the entire period; the tape respects momentum, never mean-reverting
Volatility	−0.167	0.002	0.289	−0.497	0.500	33.8	Subdued Vol — a calm tape, in the lower third of its own range

Currently in Q4 Quiet Drift, held 18 consecutive periods. Not borderline — both readings sit clear of the axes. Persistency, Volatility, correlations and betas are never coloured; only signed values with profit-and-loss valence are.

10.3 — Occupancy and transitions

Quadrant	Label	% of period
Q1	Volatile trend	49.7
Q2	Volatile chop	0.0
Q3	Quiet range	0.0
Q4	Quiet drift	50.3

Transition	Count	Note
Q4 → Q1	8	Calm to volatile, trend intact
Q1 → Q4	8	Volatility drains, trend intact

Persistency moves slowly.

LOW's Persistency has stayed positive the entire period — it held one value (+0.239) from June through December 2025 before drifting — so the stock has only ever occupied the two trending quadrants (Q1 and Q4), never the mean-reverting ones. All 16 transitions are the volatility axis moving while the trend character does not. That is the series behaving normally, not a signal. These statistics describe the stated window and are not predictions.

11Driver exposure · Market and Sector

87.9

of daily variance is company-specific

Regression on Market Driver 1 and Sector Driver 1, 305 overlapping observations, 3 Jun 2025 – 19 Aug 2026.

11.1 — Driver correlations

Driver	Correlation	R² (%)	Rolling 60d	Rolling min	Rolling max	Stability	Direction
Market Driver 1 Primary	0.067	0.4	0.073	−0.142	0.249	Stable	Positive
Market Driver 2	0.004	0.0	0.130	−0.338	0.194	Variable	Neutral
Market Driver 3	−0.018	0.0	−0.192	−0.202	0.254	Variable	Neutral
Market Driver 4	0.000	0.0	−0.032	−0.154	0.220	Stable	Neutral
Market Driver 5	−0.069	0.5	−0.229	−0.229	0.106	Stable	Negative
Sector Driver 1 Primary	−0.325	10.6	−0.147	−0.662	−0.032	Variable	Negative
Sector Driver 2	−0.043	0.2	−0.377	−0.384	0.440	Variable	Neutral
Sector Driver 3	−0.058	0.3	0.030	−0.331	0.122	Variable	Negative

Market Drivers 1–5 then Sector Drivers 1–3. Daily log returns vs first-differenced Market Driver levels and return-scaled Sector Driver values. Correlations are never coloured. Drivers as of 19 Aug 2026 — 1 trading day behind the report date.

11.2 — Systematic vs idiosyncratic

Systematic 12.1%

Idiosyncratic 87.9%

Driver	Raw beta	Standardised beta	Share of explained variance
Market Driver 1 (primary)	0.00013	0.124	~7%
Sector Driver 1 (primary)	−0.207	−0.346	~93%

This is an idiosyncratic name, not a beta vehicle. Nearly 88% of LOW's daily variance is company-specific, its correlation to the primary market driver is effectively zero, and the only systematic tie of any size is an inverse link to the primary sector driver. For the next 10–30 days that means the company — its post-earnings digestion, its DIY/housing narrative — decides the month far more than the index does; a broad-market move need not carry LOW with it, and an index hedge would not have offset it.

11.3 — Rolling 60-day driver correlation

Market Driver 1 (solid) and Sector Driver 1 (dashed) against LOW's daily returns. The market tie hovers near zero throughout; the sector tie is persistently negative and dipped to −0.66 in spring 2026 before easing back toward −0.13 — the inverse sector relationship is real but varies in intensity.

12Performance by market regime

Every group is named, never its proxy ticker. Conditional statistics describe the stated window and are not forecasts.

12.1 — US market · currently in Q1 Volatile trend

Market regime	Days	% of period	Cumulative return	Ann. return	Ann. vol	Sharpe	Hit rate	Best day	Worst day
Quiet drift	108	35.4	+12.1%	+30.5%	25.5	1.20	51.9	+4.57	−3.71
Volatile chop	55	18.0	+3.5%	+17.0%	27.0	0.63	50.9	+5.07	−3.66
Quiet range	51	16.7	−2.1%	−9.8%	28.4	−0.34	56.9	+4.20	−5.75
Volatile trend Current	91	29.8	−14.1%	−34.4%	26.8	−1.29	41.8	+4.42	−4.21

12.1b — SP500 · currently in Q1 Volatile trend

Market regime	Days	% of period	Cumulative return	Ann. return	Ann. vol	Sharpe	Hit rate	Best day	Worst day
Quiet range	74	24.3	+5.7%	+20.7%	27.4	0.76	56.8	+4.57	−5.75
Volatile chop	72	23.6	+1.2%	+4.4%	25.7	0.17	50.0	+5.07	−3.66
Quiet drift	68	22.3	−0.2%	−0.6%	28.0	−0.02	50.0	+3.95	−3.71
Volatile trend Current	91	29.8	−8.7%	−22.2%	25.9	−0.86	42.9	+4.42	−4.21

12.1c — Global market · currently in Q2 Volatile chop

Market regime	Days	% of period	Cumulative return	Ann. return	Ann. vol	Sharpe	Hit rate	Best day	Worst day
Quiet range	141	46.2	+17.3%	+33.1%	25.9	1.28	53.9	+4.57	−5.75
Volatile chop Current	131	43.0	−8.1%	−14.9%	26.3	−0.57	48.1	+5.07	−3.66
Volatile trend	33	10.8	−9.6%	−53.6%	30.4	−1.76	36.4	+4.42	−4.21

Three of the four quadrants clear the 10-day minimum for Global market; Quiet drift did not and is omitted. Best row tinted green, worst red, current regime badged.

12.2 — Cross-group summary

Group	Current regime	Best regime	Worst regime	Cum. in current	Sharpe in current	Sharpe spread	Days in current
US market	Volatile trend	Quiet drift	Volatile trend	−14.1%	−1.29	2.49	91
SP500	Volatile trend	Quiet range	Volatile trend	−8.7%	−0.86	1.62	91
Global market	Volatile chop	Quiet range	Volatile trend	−8.1%	−0.57	3.04	131
Bonds long	Quiet range	Quiet range	Volatile chop	+6.5%	+0.23	1.89	266
Bonds mid	Quiet range	Quiet range	Quiet drift	+15.6%	+0.72	2.52	221
Bonds near	Quiet range	Volatile trend	Volatile chop	+28.1%	+1.88	8.15	167
Energy	Volatile trend	Volatile chop	Volatile trend	−22.7%	−1.60	3.06	95
Europe	Volatile trend	Volatile chop	Volatile trend	−16.9%	−2.61	3.60	42
Financials	Quiet drift	Volatile chop	Volatile trend	−3.2%	−0.77	1.60	37
Gold	Volatile chop	Quiet range	Volatile chop	−16.8%	−0.61	6.25	258
Technology	Quiet range	Quiet drift	Volatile chop	+4.3%	+0.36	10.90	103
Utilities	Volatile chop	Quiet range	Volatile trend	−2.3%	−0.31	3.97	83
VIX Mid	Quiet drift	Quiet range	Volatile trend	+1.7%	+0.14	3.86	113
VIX Near	Quiet range	Quiet range	Quiet drift	−0.4%	−0.01	0.41	255

All 14 mapped groups. Cumulative return and Sharpe carry valence and are coloured; the Sharpe spread is a magnitude and is not.

12.3 — Sensitivity

Most sensitive to the US-market regime (Sharpe spread 2.49: Quiet Drift +1.20 versus Volatile Trend −1.29) — and the US market sits in Volatile Trend right now, the unfavourable end of that spread.

What has historically accompanied this configuration. In the US-market Volatile Trend regime LOW's daily returns have compounded to −14.1% (−34% annualised, Sharpe −1.29). Stated as history, not forecast — it is the weakest of the four backdrops for the name.

Currently an unfavourable equity configuration. US market, S&P 500, Global, Energy and Europe are all in high-volatility regimes; only the rate/bond groups sit in the calmer Quiet Range that has historically been kinder to LOW.

Ignore the extreme spreads. Technology (10.9) and Bonds near (8.15) are inflated by small or single-regime buckets; the reliable read is the broad-equity Volatile Trend backdrop, not those outliers.

Do not trade this table.

Regime-conditional history describes 3 Jun 2025 – 19 Aug 2026, not the future. Buckets with fewer than 30 days are thin and their annualised figures should not be relied on. Market regime series as of 19 Aug 2026 — 1 trading day behind the report date.

13News and market narrative

Date	Headline	Sentiment
19 Aug 26	Q2 sales +8.3% to $26.0B; adjusted EPS $4.40 beats the ~$4.24 bar	Positive
19 Aug 26	Lowe's cuts FY26 guide to the bottom of every range on persistent DIY softness	Negative
19 Aug 26	Shares reverse a ~2% premarket drop to close +2% as the low bar is cleared	Positive
19 Aug 26	Online sales +15.7%; Pro and Home Services drive a 5th straight positive comp	Positive
18 Aug 26	Home Depot comps +1.7% and reaffirms guide, setting a softer bar than LOW's cut	Neutral
13 Aug 26	Citigroup cuts target to $267 from $285 ahead of the print	Negative
11 Aug 26	Wells Fargo trims target to $245 from $255	Negative
31 Jul 26	JP Morgan cuts target to $252 from $279 on demand caution	Negative
23 Jul 26	Stock prints a 52-week low near $199 amid housing gloom	Negative
9 Oct 25	Lowe's completes ~$8.8B Foundation Building Materials acquisition	Positive
Aug 25	Lowe's acquires Artisan Design Group to extend Pro/homebuilder reach	Positive
25 Feb 26	Q4 FY25 print and cautious tone send shares down ~6%	Negative

10–12 items, newest first.

14Company snapshot

Field	Lowe's Companies, Inc.	Peer context
Legal name	Lowe's Companies, Inc.	—
Exchange / IPO	NYSE: LOW / IPO 1961	Home Depot listed 1981
Domicile	Mooresville, North Carolina, USA	HD: Atlanta, Georgia
Sector / industry	Consumer Discretionary / Home Improvement Retail	—
Market cap	$123.4B	~1/3 of Home Depot's $343B
Employees	276,000	HD ~470,000
TTM revenue	$90.4B	HD $169.2B
Revenue model	Big-box home improvement: DIY + Pro; products, appliances, installation, interior-products distribution	Shared with HD
Key differentiators	#2 US home-improvement retailer; ~1,761 stores, 196M sq ft; Pro pivot via FBM + ADG; Total Home strategy	HD leads in Pro scale
CIK	0000060667	—
Website	lowes.com	—

Overall view · next 10–30 days

Mixed · rangebound, modest positive lean

The evidence favours a rangebound month. LOW is cheap at 18.6×, de-risked by the guidance reset, 88% idiosyncratic, and sitting in its own favourable Quiet Drift regime with a dividend paying the wait — but organic growth has stalled at +0.2% comps, margins are compressing, and the broad market is in the high-volatility regime that has historically been LOW's worst. With no company catalyst until November, the 16 September FOMC is the single condition that would flip it: a dovish rate signal is the clearest path from range to breakout, a hawkish one deepens the housing overhang.

Volatility Farm

1 · Prices, market capitalisations and reference data from Nasdaq. Last completed session 19 Aug 2026 close.
2 · Financial statements from Lowe's Q2 FY2026 and prior earnings releases and 8-K filings; peer figures from Home Depot, Floor & Decor and Tractor Supply disclosures.
3 · Persistency, Volatility and Market/Sector Driver series from the proprietary Trader workbook (Individual regimes daily, Market regimes daily, SVD market, SVD sectors), as of 19 Aug 2026, 1 trading day behind this report date.
4 · Figures marked e are derived rather than reported: Adjusted EBITDA and margin (operating income + estimated D&A); EV/EBITDA, net debt, net-debt/EBITDA and interest coverage; asset turnover, revenue/employee and PEG; peer gross/operating/EBITDA margins; P/S as market cap ÷ TTM revenue; TTM revenue as the sum of the four quarters through 31 Jul 2026.
5 · This report evaluates the likely outcome over the next 10–30 days from 20 Aug 2026. Regime and driver statistics are descriptive of their stated windows and are not predictions.
6 · This is an analytical document, not investment advice.

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