LOW · Lowe's Companies, Inc.

Home Improvement · mkt cap $115.9B · calls: Q1 FY2026 vs Q4 FY2025

55.0 conviction · conf-adj 55

conf 3/10 partial

enthusiasm:24.0 · trend:0 · quantifies:0 · impact:0 · under_radar:5 · credibility:12 · business_impact:8 · disruption:0 · commitment:6 · confirmation:0

Enthusiasm latest 8 / prev 9 (flat)

Lowe's AI thesis is credible because management ties AI to concrete customer conversion, associate productivity, Pro quote automation, customer service, replenishment and software-development productivity. Enthusiasm remains high, but Q1 FY2026 is slightly more operational and less expansive than Q4 FY2025, with stronger latest-call evidence on online conversion and Pro workflow automation.

GROUNDED NEXT-FY IMPACT vs CONSENSUS

Grounded on actual base — revenue $86.3B · net income $6.7B · net margin 7.7% · diluted EPS 11.85

These are next-fiscal-year annual uplift estimates, not next-quarter numbers.

Aggregate next-FY est. rev uplift: % · next-FY EPS uplift: % · vs analysts: unclear · priced in: medium · confidence: 3/10

Claim	Figure	Arithmetic
Mylow: >1M customer inquiries/month engagement · soft	over 1M customer inquiries/month (~12M+/yr)	Volume metric only. No online-revenue base, $/inquiry conversion value, or order value disclosed anywhere in inputs; cannot anchor to $86.286B revenue or $6.654B NI.
Mylow online conversion 'triple' vs non-users (Q1) engagement · soft	3x conversion	Relative lift only. No baseline online conversion rate, online revenue/traffic, AOV, or share of online orders touching Mylow disclosed; incremental revenue uncomputable.
Materials-list quote time: days -> minutes productivity · soft	days->minutes	Cycle-time metric only. No pro-quote volume, labor hours/wage per quote, win-rate delta, or cost base disclosed; no revenue or after-tax saving computable.
Mylow companion: >5M associate questions since launch productivity · soft	5M+ questions cumulative	Cumulative adoption count, not a rate; no minutes-saved/question, wage rate, or labor-cost base attached, so no after-tax saving vs $6.654B NI.
Mylow assistant+companion ~1M questions/month (Q4) engagement · soft	~1M questions/mo	Usage rate only; blends customer and associate use and lacks monetization, cost-deflection, or labor-saving dollars. Not sizeable.
Customer-service improvement '200 bps range' in adopting stores other · soft	200 bps	200 bps is a customer-service-score delta, NOT a margin or revenue delta, and applies only to a non-disclosed subset of stores; cannot flow to P&L.
Mylow online conversion 'roughly double' (Q4) engagement · soft	2x conversion	Relative lift only; same gap as the 'triple' claim - no online-revenue base or Mylow penetration to size it.
Dev/code-review AI: 'double-digit' productivity gains productivity · soft	double-digit %	% with no base: tech-team headcount/comp not disclosed, so saving_$ = pct * base is uncomputable. Management frames it as reinvested in speed-to-market, not a booked opex cut.

Assumptions: Default incremental net margin = current net margin 7.71%; tax rate 21%; phasing would attribute only the next-FY portion. None applied because no claim supplies a dollar revenue base or dollar cost/headcount base - every figure is a volume count, a unitless conversion multiple, a service-score bps, or an unanchored '%'. Online revenue, Mylow order-share, pro-quote volume, and tech-team cost were all undisclosed. All claims are LOW's own operations improving (adopter); none sell AI capacity (no supplier side).

Top line: Directionally positive but unquantifiable from disclosure. Strongest signal is Mylow online conversion at 2x-3x non-users plus 12M+ annualized inquiries, but with no online-revenue base and no disclosed share of online orders touching Mylow, incremental revenue cannot be computed without inventing the base - so est_rev_uplift_pct is null, not zero. The benefit is real but unsized.

Bottom line: Also unquantifiable. Quote-time 'days->minutes', 5M+ associate questions, '200 bps' service improvement, and 'double-digit' dev productivity all lack a dollar cost or headcount base, so no after-tax saving (saving x 0.79) can be computed. Management frames productivity as reinvested in speed-to-market and selling time rather than a booked opex cut.

[impact n/m (all claims soft/unanchored)] Consensus already embeds healthy growth: revenue $86.286B current -> $93.130B FY27 (+~7.9%); EPS rises into the ~$12.48 range. Against base revenue ~$86.29B and NI $6.654B, a sized AI uplift would have to be benchmarked to that trajectory - but with zero anchored AI dollars, no aggregate adopter uplift % exists to compare. The qualitative conversion/productivity gains are most plausibly already inside consensus's modest margin and comp assumptions, so 'medium'.

MODEL CONSENSUS (impact)

partial

Both fully agree: all claims adopter-side, unanchored, soft=true; no computable rev/EPS uplift. Only confidence and EPS-base citation differed.

Conflicts reconciled

confidence: X=2 vs Y=4 -> used 3 (average); identical all-null analysis but differing certainty
reasoning EPS base: X=12.26 FY26 vs Y=11.85 current -> kept range-based ~$12.48 to avoid disputed base

Field	Opus 4.8	GPT-5.5
Rev uplift %	–	–
EPS uplift %	–	–
Priced in	medium	medium
vs analysts	unclear	unclear
Confidence	2	4
Top line	Directionally positive but unquantifiable from disclosure. The strongest topline signal is Mylow online conversion at 2x-3x non-users, but with no online-revenue base and no disclosed share of online orders touching Mylow, the incremental revenue cannot be computed without inventing the base — so est_rev_uplift_pct is null, not zero. The benefit is real but unsized.	Management cites substantial Mylow engagement, including 12M+ annualized customer inquiries and online conversion rates roughly double to triple for users, but without baseline online revenue, conversion, traffic, or AOV, the revenue uplift cannot be converted into a hard percentage of $86.286B revenue.
Bottom line	Also unquantifiable. Quote-time 'days->minutes', 5M associate questions, '200 bps' service improvement, and 'double-digit' dev productivity all lack a dollar cost or headcount base, so no after-tax saving (saving x 0.79) can be computed. Management frames productivity as reinvested in speed-to-market and selling time rather than a booked opex cut, reinforcing that no hard EPS line is claimed.	Productivity claims include quote generation moving from days to minutes, 5M+ associate questions, and double-digit tech productivity gains, but none disclose the relevant labor/cost base or dollar savings, so EPS uplift versus $6.654B net income is unanchored.
Reasoning	Consensus already embeds healthy growth: revenue $86.06B (FY26) -> $93.13B (FY27, +8.2%) -> $96.04B (FY28); EPS $12.26 -> $12.48 -> $13.43. Against base revenue $86.29B and NI $6.654B, a sized AI uplift would have to be benchmarked to that trajectory — but with zero anchored AI dollars, no aggregate adopter uplift % exists to compare. The qualitative conversion/productivity gains are most plausibly already inside consensus's modest margin and comp assumptions, so 'medium' rather than a demonstrable 'low' (above-consensus) gap.	Consensus revenue rises from $86.286B current to $93.130B for FY2027, a $6.844B increase or 7.932% growth; consensus EPS rises from $11.85 to $12.48019, a $0.63019 increase or 5.318%. Because calculable AI uplift is null rather than a hard figure above or below those growth rates, there is no numeric basis to call AI upside ahead of consensus.

Rows highlighted where the two models disagreed.

QUANTIFICATIONS

Mylow customer inquiries: over 1 million customer inquiries each month (Since launching 1 year ago, topline)
“Since launching 1 year ago, Mylow adoption has scaled meaningfully and now supporting over 1 million customer inquiries each month.”

Mylow online conversion rate: triple (Q1 FY2026, topline)
“Importantly, the conversion rate for online customers who use Mylow is triple that of customers who do not use the tool, suggesting a well-designed agentic AI experience can be a clear driver in the purchasing decision.”

Materials list quote-generation time: from days to minutes (Q1 FY2026, bottomline)
“Now with this AI-enabled tool, we've reduced that time from days to minutes.”

Mylow companion associate questions: more than 5 million questions (since its launch, bottomline)
“Our associates are embracing this technology. In fact, they have asked more than 5 million questions through Mylow companion since its launch, reflecting strong adoption across our stores.”

Mylow virtual assistant and companion usage: roughly 1 million questions a month (Q4 FY2025, both)
“We've seen roughly 1 million questions a month come through this virtual assistant and this companion tool.”

Customer service improvement where associates adopt Mylow: 200 basis points range (Q4 FY2025, both)
“We've seen dramatic improvements in customer service in a 200 basis points range in our stores where associates are adopting this, and we're seeing our conversion rates online roughly double when customers engage with Mylow.”

Mylow online conversion rate: roughly double (Q4 FY2025, topline)
“We've seen dramatic improvements in customer service in a 200 basis points range in our stores where associates are adopting this, and we're seeing our conversion rates online roughly double when customers engage with Mylow.”

AI tools for development and code review productivity gains: double-digit productivity gains (Q4 FY2025, bottomline)
“how the tech team is using AI tools for development and code review, and they're seeing double-digit productivity gains and increasing speed to market.”

PAST (realized)

Since launching 1 year ago, Mylow adoption has scaled meaningfully and now supporting over 1 million customer inquiries each month.
Now with this AI-enabled tool, we've reduced that time from days to minutes.
We've seen roughly 1 million questions a month come through this virtual assistant and this companion tool.
We've seen dramatic improvements in customer service in a 200 basis points range in our stores where associates are adopting this, and we're seeing our conversion rates online roughly double when customers engage with Mylow.

CURRENT (now)

Importantly, the conversion rate for online customers who use Mylow is triple that of customers who do not use the tool, suggesting a well-designed agentic AI experience can be a clear driver in the purchasing decision.
Over the past year, we continued to scale Mylow companion, our AI-powered tool designed to support associates on the sales floor.
As we continue to integrate AI-enabled tools into our operations, we're making it easier for associates to deliver a better customer experience while driving productivity at the same time.
We continue to execute on multiple inventory productivity initiatives through AI-enabled solutions while also benefiting from SKU rationalization.

FORWARD (guidance)

As we look ahead into 2026, we'll empower our merchants with new AI tools that make their workday more efficient, freeing up time for them to focus on driving sales and optimizing our product assortments.
And as customers continue to integrate AI into their shopping habits, we are collaborating with leading digital platform so that we are well positioned to participate in Agentic commerce.
Capital expenditures totaled $521 million, reflecting continued investment in our Total Home strategy, including tech-driven productivity efforts and key AI initiatives.

TRACK RECORD — PROMISE vs DELIVERY

70/100 track record delivers 6 calls reviewed

Lowe's tends to report AI results retrospectively rather than issue big forward targets, but the few concrete, dated AI milestones it did commit to — chiefly the 'next month' OpenAI virtual-advisor launch and the chain-wide Companion rollout — were delivered on time, and its stated usage metrics held or improved. The judgeable promise set is thin, but clean on what was committed.

Launch the first AI-powered home improvement virtual advisor on lowes.com (with OpenAI) 'next month' — promised Q4 FY2024
delivered Delivered on schedule — MyLowe's AI virtual advisor was live and discussed as launched in the very next call

Roll out MyLowe's Companion AI associate app across all 1,700+ stores at scale — promised Q1 FY2025
delivered Confirmed company-wide in later calls; adoption 'surpassed targets,' 5M+ associate questions asked by Q1 FY2026

Mylow virtual assistant answering ~1 million questions/month with conversion roughly doubling — promised Q3 FY2025
delivered Metric held and grew — Q1 FY2026 reported 'over 1 million inquiries/month' with conversion now triple non-users

Empower merchants with new AI tools in 2026; AI materials-list quoting from days to minutes — promised Q4 FY2025
too-early Materials-list AI tool launched and cited in Q1 FY2026; broader merchant-AI rollout still early, no hard metric yet

PRICED-IN (REFINED)

MEDIUM

Est. revisions rising · Fwd P/E 16.9 · EV/Sales 1.8x

AI claim maps to Home Decor, Building Products, Hardlines

Analyst rating mix has migrated upward, with combined strongBuy/buy counts rising from 22 in January to 24 in June and holds falling, so rising estimates/revisions make AI upside more priced-in, not less. However, price targets are not rising, with last-month and last-quarter averages equal and below the last-year average, while forward EPS/revenue growth is modest. Valuation at 16.9x forward P/E and 1.8x EV/sales is not extremely stretched for a mature retailer, so the signals are mixed rather than fully priced in.

COVERAGE — ENTHUSIASM TRAJECTORY + CATALYSTS

7Q4 FY20247Q1 FY20254Q2 FY202510Q3 FY20255Q4 FY20259Q1 FY2026

AI enthusiasm across 6 calls — trend ↗ rising

AI moved from virtual-advisor launches to measurable conversion, service, and productivity impact, despite uneven emphasis in some quarters.

RECENT AI CATALYSTS & NEWS

BUSINESS IMPACT - QUALITATIVE MATERIALITY

7/10 qualitative impact material near-term · mixed evidence

Where AI matters: online conversion, Pro quoting, associate productivity

Lowe's has real deployments rather than pilots: Mylow handles over 1M customer inquiries monthly, users convert at 3x non-users, and AI-enabled Pro materials lists cut quote creation from days to minutes. The upside is material for ecommerce, Pro workflow, store productivity and inventory execution, but still lacks disclosed revenue, margin or EPS dollars, so it is not yet transformational.

Caveats: Conversion lift may reflect self-selection by higher-intent shoppers rather than pure AI causality; No disclosed online sales penetration, Pro quote volume, labor savings, or EPS contribution; Benefits may be competed away if Home Depot and marketplaces deploy similar tools; Agentic commerce could increase price transparency and weaken retailer control of customer discovery

AI DISRUPTION / CANNIBALIZATION RISK tailwind · 2/10

AI does not automate away the core demand for home improvement products, stores, local fulfillment, trade relationships, or project materials. The main threat is that agentic shopping interfaces could shift discovery and price comparison power away from Lowe's, but that pressures channel economics rather than commoditizing the core model.

OPTIONS / MARKET STRUCTURE

option liquidity: good

ATM IV

—

TYPICAL BID-ASK

—

OPEN INTEREST

—

proxy inputs — dollar-ADV $659M · beta 0.904 · px $206.62

source: proxy (no options chain on FMP)
FMP /stable/ exposes no options-chain endpoint on this key, so ATM IV, bid-ask spread and open interest are unavailable. Liquidity below is a PROXY from dollar-ADV, beta and price level (a stand-in for option depth), not measured option-market data.

CONFIRMATION — INSIDERS · 13F · LANGUAGE

Mixed — insiders selling, institutions flat, management language 7/10 committed.

INSIDERS selling 4 open-market sell(s) vs 0 buy(s) — net distribution

INSTITUTIONS (13F) flat as of 2026-03-31: 163 new / 197 closed positions; 1149 increased / 1116 reduced; institutional ownership -1.49pp; -32 net 13F holders

MGMT LANGUAGE 7/10 committed Brief AI discussion, but stance is concrete: scaled usage, triple conversion, and direct tie to purchasing decisions.

commit “Mylow adoption has scaled meaningfully and now supporting over 1 million customer inquiries each month.”

commit “the conversion rate for online customers who use Mylow is triple that of customers who do not use the tool”

hedge “suggesting a well-designed agentic AI experience can be a clear driver in the purchasing decision.”

VERBATIM AI QUOTES

“We're also pleased by the impact of Mylow, our AI-powered shopping assistant is having on the online shopping experience, giving our customers the ability to ask questions on recommendations budget guidance and other home improvement needs.”
— Marvin Ellison, Q1 FY2026

“Since launching 1 year ago, Mylow adoption has scaled meaningfully and now supporting over 1 million customer inquiries each month.”
— Marvin Ellison, Q1 FY2026

“Importantly, the conversion rate for online customers who use Mylow is triple that of customers who do not use the tool, suggesting a well-designed agentic AI experience can be a clear driver in the purchasing decision.”
— Marvin Ellison, Q1 FY2026

“And we're continuing to leverage AI to create new capabilities.”
— Joseph McFarland, Q1 FY2026

“A recent example is our launch of materials list. PROS can bring in the list in just about any format, whether a photo, handwritten note, PDF or spreadsheet, and our associates can use this tool to convert it into an actionable quote.”
— Joseph McFarland, Q1 FY2026

“Now with this AI-enabled tool, we've reduced that time from days to minutes.”
— Joseph McFarland, Q1 FY2026

“Over the past year, we continued to scale Mylow companion, our AI-powered tool designed to support associates on the sales floor.”
— Joseph McFarland, Q1 FY2026

“Our associates are embracing this technology. In fact, they have asked more than 5 million questions through Mylow companion since its launch, reflecting strong adoption across our stores.”
— Joseph McFarland, Q1 FY2026

“As we continue to integrate AI-enabled tools into our operations, we're making it easier for associates to deliver a better customer experience while driving productivity at the same time.”
— Joseph McFarland, Q1 FY2026

“Capital expenditures totaled $521 million, reflecting continued investment in our Total Home strategy, including tech-driven productivity efforts and key AI initiatives.”
— Brandon Sink, Q1 FY2026

“And as customers continue to integrate AI into their shopping habits, we are collaborating with leading digital platform so that we are well positioned to participate in Agentic commerce.”
— Marvin Ellison, Q4 FY2025

“As we look ahead into 2026, we'll empower our merchants with new AI tools that make their workday more efficient, freeing up time for them to focus on driving sales and optimizing our product assortments.”
— William Boltz, Q4 FY2025

“With the recent rollout of our new AI-enabled Pro Companion, we're giving our Pro sales team even more opportunities for success.”
— Joseph McFarland, Q4 FY2025

“This new capability helps sales associates quickly prepare for conversations with Pros by enabling rapid access to relevant information so they can walk in with recommendations already in hand, leading to more effective customer interactions.”
— Joseph McFarland, Q4 FY2025

“Using real-time data to identify out-of-stocks, this AI-enabled technology sends stores a prioritized list of the most critical items to restock, which helps ensure that products are available where and when customers need them.”
— Joseph McFarland, Q4 FY2025

“We continue to execute on multiple inventory productivity initiatives through AI-enabled solutions while also benefiting from SKU rationalization.”
— Brandon Sink, Q4 FY2025

“I think for us, we set an internal framework that AI will help us improve how we sell, shop, and work.”
— Marvin Ellison, Q4 FY2025

“We've seen roughly 1 million questions a month come through this virtual assistant and this companion tool.”
— Marvin Ellison, Q4 FY2025

“We've seen dramatic improvements in customer service in a 200 basis points range in our stores where associates are adopting this, and we're seeing our conversion rates online roughly double when customers engage with Mylow.”
— Marvin Ellison, Q4 FY2025

“how the tech team is using AI tools for development and code review, and they're seeing double-digit productivity gains and increasing speed to market.”
— Marvin Ellison, Q4 FY2025

ANALYST QUESTIONS ON AI

Q (Q1 FY2026, Peter Benedict): I mean PPI is important, right, for helping you guys protect profitability in this period where demand is sluggish. There was some discussion of AI in the prepared remarks around how it's helping associates. It's also helping customers online. I'm wondering if there's -- if you can talk a little
A: Not included in provided transcript excerpt.

Q (Q4 FY2025, Michael Lasser): And my follow-up question is a bit broader of a question, but Marvin, there's a lot of focus in the market and in the economy as of late, about what all of the technological innovation is gonna mean, both for companies as well as industries. The home improvement sector seems to be perceived to be a bit more insulated, at least as of today. How are you thinking about the broader impact of artificial intelligence on home improvement? How is Lowe's looking at the potential positive versus the drawbacks from deploying all this technology, both from a demand perspective as well as how it's evolving the cost structure over the next couple of years?
A: No, well, Michael, I appreciate the question. I think for us, we set an internal framework that AI will help us improve how we sell, shop, and work. Basically, as we think about AI internally, we frame it around those three strategic areas of our business. As a result of that, we're very focused on employing AI to help our associates sell, to improve the shopping environment for our customers, both in-store and online, and creating productivity in the workspace, both in-store and at our store support center.