Lowe’s Stock Drops Below $220 Ahead of Earnings: Where Will Support Step In?

Lowe's stock (NYSE: LOW) heads into today's earnings trading just shy of $220 per share in today's pre-market session. This represents 6.18% decrease in the last five days, and an 11% drop since the start of the year. With $230, and now $220 giving way, the stock's recent performance raises questions about where support levels might emerge and whether the company can deliver results that reassure the markets.

Analysts expect a stable, mildly positive quarter for Lowe’s, projecting EPS of $2.95, slightly above the $2.89 reported a year ago, along with revenue of about $20.84 billion, which would represent an estimated 3.34% year-over-year sales increase.

This slight projected growth underscores the challenges Lowe's faces in a market where consumer spending on home improvement is being closely watched amid broader economic uncertainties. The pressure is on Lowe's to not only meet but exceed these expectations to bolster market confidence.

Lowe's recent acquisition of Foundation Building Materials (FBM) for $8.8 billion is a strategic move aimed at strengthening its position in the professional contractor market. FBM's extensive network of over 370 locations across the U.S. and Canada provides Lowe's with enhanced product offerings and improved fulfillment capabilities for its professional clients. The success of this acquisition in driving revenue growth and improving margins will be a key focus during the earnings call.

The company's commitment to returning value to shareholders is evident in its recent declaration of a quarterly cash dividend of $1.20 per share, payable on February 4, 2026. This consistent dividend payout provides some stability, particularly in times of market volatility.

However, not all news is positive. Recent insider stock sales, including a significant sale by Senior Vice President Dan Clayton Griggs Jr., have raised some concerns. While insider sales do not necessarily indicate a negative outlook, they can sometimes influence market sentiment and contribute to downward pressure on the stock price.

While the prevailing sentiment seems cautious, a contrarian viewpoint might suggest that the current stock price dip presents a buying opportunity. The market may be overreacting to short-term headwinds and undervaluing Lowe's long-term potential. The FBM acquisition, while expensive, could prove to be a game-changer, significantly boosting Lowe's presence in the lucrative professional market.

Furthermore, the dividend yield provides a cushion against potential downside risk. The upcoming earnings report, if surprisingly positive, could trigger a significant rally. Perhaps the insider selling was simply executives diversifying their portfolios. The current fear could be an opportunity to accumulate a quality stock at a discounted price.

Looking ahead, the key question is: where will support step in for Lowe's stock? The $220 level could yet act as initial support, representing a psychologically important round number. However, if selling pressure intensifies, the stock may test the $215 or even $210 levels, which have acted as support in the past.

The upcoming earnings report will be pivotal in determining the stock's trajectory from here. Strong earnings and positive guidance could reverse the current downtrend and propel the stock higher; whilst anything but could trigger further selling and lead to a test of lower support levels.