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Is Lowe’s Companies, Inc. (LOW) the Best Home Appliance Stock to Buy According to Analysts?
We recently published a list of 10 Best Home Appliance Stocks to Buy According to Analysts. In this article, we are going to take a look at where Lowe’s Companies, Inc. (NYSE:LOW) stands against other best home appliance stocks to buy according to analysts.
Overview of the US Home Appliance Industry
The home appliance industry is likely to continue flourishing as long as people continue buying homes and relying on technology to make their daily tasks easier. According to Grand View Research, the household appliances market in the US was valued at $58.33 billion in 2023. It is anticipated to grow at a compound annual growth rate (CAGR) of 7.1% between 2024 and 2030. One of the primary driving forces behind this growth is the rise in the disposable income levels of consumers. In addition, the rapid pace of urbanization is also a pivotal factor behind the market’s expansion.
According to a report by Mordor Intelligence, the United States’ major home appliances market is expected to have a market size of $34.42 billion in 2025. It is anticipated to grow at a compound annual growth rate of 2.93% between 2025 and 2030, reaching $39.77 billion at the end of the forecast period. The growing economic pressure and changing consumer lifestyles are the primary reasons behind the growth in the major home appliances market in the US.
In addition, the rising penetration of distribution channels such as brand outlets, supermarkets, specialty stores, and e-commerce is contributing to this growth. The demand for primary household appliances such as washing machines, dishwashers, and mixer grinders is significantly increasing due to consumers’ busy and sedentary lifestyles. Another report by Mordor Intelligence shows that the overall US home appliance market size will grow at a compound annual growth rate of 3% between 2025 and 2030, reflecting similar trends.
Trends in the US Home Appliance Market
A prominent trend emerging in the home appliance industry is people opting to purchase home appliances directly from manufacturers instead of using traditional middlemen. According to PWC’s June 2023 Global Consumer Insights Pulse Survey, a majority of customers, around 63%, reported buying products directly from a brand’s website. This number is expected to rise in the coming years, as around 29% of the consumers stated that while they hadn’t yet adopted this trend, they were thinking about going direct-to-consumer.
The US Appliance Satisfaction study conducted by J.D. Power in 2023 showed that around 75% of appliance purchases occurred on the first store visit. In addition, nearly 71%, or three-fourths of home appliance transactions, took place in-store. Although 29% of the purchases occurred online, a majority of consumers still preferred seeing the equipment in person before buying it.
In 2023, Christina Cooley, home intelligence lead at J.D. Power, stated:
“This year’s data shows us that 56% of home appliance shoppers are doing their research online before heading in-store to purchase. Though price is almost always going to be the main driver of whether someone decides to purchase an appliance or not, one-third of buyers did not purchase because they were seeking specific options and features, and one-fifth indicated they couldn’t purchase, as their desired appliance wasn’t in stock.”
Will the Growth of the Housing Market Affect the Home Appliance Industry?
According to Mordor Intelligence, the US housing sector is likely to generate growing demand for home appliances. It is, thus, a prominent driving force behind the industry’s future growth prospects. Development of the housing sector and improvement in people’s living conditions have a direct positive effect on the growth of the home appliance market. Therefore, a growing housing sector in the US is expected to trigger growth in the country’s home appliance market.
Our Methodology
We sifted through stock screeners, online rankings, and ETFs to compile a list of 30 home appliance stocks. We then selected the top 10 stocks with the highest analyst upside potential as of January 2, 2025. The list is sorted in ascending order of analyst upside.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Is Lowe’s Companies, Inc. (LOW) the Best Home Appliance Stock to Buy According to Analysts?
A family excitedly browsing through the aisles of a home improvement retail store.
Lowe’s Companies, Inc. (NYSE:LOW) offers home improvement products in various categories, including appliances, lawn and garden, kitchens and baths, and building materials among others. Its portfolio includes an elaborate collection of national brand-name merchandise and its private brands. The company operates more than 1,700 home improvement stores.
It reported sales worth $20.2 billion in fiscal Q3 2024, which were primarily driven by the company’s strength in two key categories: online sales and Pro, which offers membership discounts based on how much the customers spend.
Lowe’s Companies, Inc. (NYSE:LOW) has three primary business drivers that are continually working in its favor. These include strong home price appreciation, disposable personal income outpacing inflation, and the medium age of homes in the US standing at its oldest in US history. These drivers are anticipated to support demand for the company’s offerings in the long term, as existing homeowners are likely to continue investing in home upgrades and repairs.
Madison Investors Fund stated the following regarding Lowe’s Companies, Inc. (NYSE:LOW) in its Q3 2024 investor letter:
“In the third quarter, the top five individual contributors to performance relative to the benchmark were Parker-Hannifin Corporation, Fiserv, Lowe’s Companies, Inc. (NYSE:LOW), Brookfield Corporation, and Progressive Corporation. Despite operating in very different sectors, Lowe’s Companies and Brookfield Corporation are both expected to benefit from the economic activity spurred on by declining interest rates. The Federal Reserve’s decision to lower interest rates sparked investor enthusiasm for both companies during the quarter, even as their sales and profits continue to moderate. For Lowe’s, sales remained weak in the latest quarter as most measures of the housing market remain sluggish. However, if interest rates come down and mortgages become more affordable, activity should return to the housing market which will boost Lowe’s business.”
Overall, LOW ranks 8th on our list of best home appliance stocks to buy according to analysts. While we acknowledge the potential of home appliance stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LOW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
