The Home Depot, Inc. (NYSE:HD) and Lowe’s Companies, Inc. (NYSE:LOW) are selling into the same basic market, but the home-improvement business is changing. Higher borrowing costs and low housing turnover have made homeowners more reluctant to take on large remodeling projects. That has been reflected in both stocks’ performance over the last couple of years.
However, repair and maintenance work has held up better, while professional customers have become increasingly important.
That has put both retailers in a similar position, but their strategies are beginning to look different. Home Depot is leaning harder into its Pro business and using its SRS acquisition to expand what it can offer contractors. Lowe’s is trying to strengthen its Pro business while also improving its position with DIY customers.
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Home Depot is building around the Pro
The Home Depot, Inc.’s advantage has always been its scale, but its Pro strategy could make that advantage even harder to challenge.
Management said Pro customers posted positive comparable sales in the second quarter and outperformed DIY. The company has been investing in job-lot quantities, delivery, sales teams, and specialized services to make life easier for contractors. Management described those relationships as increasingly “sticky,” which is important because professional customers can bring recurring business rather than occasional purchases.
The SRS acquisition adds another layer. Home Depot can now combine its own assortment with SRS’s distribution network and specialty products, giving its Pro customers access to a much broader catalog. Management said 90% of its stores had already closed a sale through SRS over the previous 12 months.
That is more than simply adding another business. It gives Home Depot another reason for contractors to consolidate more of their spending with the company.
Lowe’s is trying to close the gap
Lowe’s Companies, Inc. has been making a similar push, although from a different starting point.
Its Pro business has been growing, particularly among small and medium-sized contractors. The company is also building out digital tools that allow Pros to plan, quote, and manage their businesses through the Lowe’s platform. Meanwhile, My Lowe’s Rewards has grown to more than 30 million members, giving the retailer a large loyalty base to work with.
The more interesting part may be what is happening with consumers. Lowe’s management says homeowners are currently favoring smaller repair and maintenance projects over major remodeling. That is a headwind for discretionary DIY spending, but it also plays into Lowe’s broader “Total Home” strategy, which includes home services and replacement projects.
There is also a longer-term opportunity. Homeowners are staying in their houses for longer, and Lowe’s management argues that an aging housing stock should eventually create more demand for repairs and improvements.
READ ALSO: Lowe’s (LOW) Leans On Pro And Online As DIY Cools
The housing market is still the catch
The housing market is still a constraint for both companies. Home Depot’s management has pointed to high borrowing costs and low housing turnover as reasons homeowners are holding back on bigger projects, while smaller repair and maintenance jobs have held up better.
That helps explain why both companies are investing now rather than simply waiting for housing to recover.
Home Depot is using its scale and SRS integration to deepen its relationship with professional customers. Lowe’s is trying to use loyalty, digital tools, fulfillment, and home services to become more useful to both Pros and homeowners.
Conclusion
Both companies have strong businesses, but their strengths are starting to look a little different. Home Depot has the edge in scale and its growing Pro business, while Lowe’s is still working to turn its investments in Pro customers, loyalty, and home services into a bigger competitive advantage.
For investors, Home Depot looks like the better stock of the two. Its larger Pro business, broader product offering, and SRS integration give it a stronger competitive position. Its scale should also put it in a good position to benefit when the home-improvement market eventually picks up. Lowe’s has a credible path to closing the gap, but more of its case depends on the company executing well on the investments it is making today.
The catch is valuation. If Lowe’s trades at around 15x forward earnings compared to Home Depot’s 19x, and the latter offers only slightly better short-term growth, analysts say. The premium valuation reflects Home Depot’s stronger moat and more established growth opportunity.
Market Sentiment
Market sentiment toward Lowe’s remained broadly steady. The number of hedge funds holding the stock in Insider Monkey’s database increased from 66 at the end of Q1 to 69 at the end of Q2 2026, while the total value of their positions edged down from about $1.82 billion to $1.81 billion.
Home Depot saw the opposite trend. The number of hedge funds holding the stock fell from 100 to 98, while the total value of their positions jumped from about $9.08 billion to $11.68 billion over the same period.
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This article is originally published at Insider Monkey.
