MW It's time to start nibbling on Lowe's and Williams-Sonoma's stocks, analyst says

By Steve Gelsi

KeyBanc analyst Bradley Thomas upgrades three big retail stocks to overweight from sector weight

KeyBanc Capital Markets analyst Bradley B. Thomas upgraded Lowe's Cos., Williams-Sonoma Inc. and La-Z-Boy Inc. shares to overweight from sector weight as quality names that have grown more attractive after recent pullbacks in the stock market.

"We believe these companies offer significant upside potential over a two- to three-year time horizon," Thomas said in a Friday research note.

Investors may want to take smaller bites of stock in the face of continued tariff uncertainty, but at current stock-price levels, Thomas said he sees "buying opportunities for patient investors."

Lowe's stock $(LOW)$ is down 10% in 2025, while Williams-Sonoma's stock (WSM) has fallen 18% and La-Z-Boy's stock $(LZB)$ has declined by 10.5% as of Thursday's closing bell. The S&P 500 has fallen 6.8% in 2025.

"LOW, WSM, and LZB all offer strong balance sheets and cash flow generation, all trade at discounts to what we view as normalized valuation, and all offer what we believe could potentially be 50%+ upside over two to three years," Thomas said.

KeyBanc also reiterated overweight ratings on Walmart Inc. $(WMT)$, Ollie's Bargain Outlet Holdings Inc. $(OLLI)$, and Casey's General Stores Inc. $(CASY)$ as other "insulated names" from tariffs and other economic headwinds.

While the retailers continue to face near-term turbulence from tariffs, the companies are well-positioned to navigate the current economic environment over the long term, Thomas said.

"We are hopeful the consumer and these names will benefit from tax policy changes, and eventually a recovery in housing and home-related spending, which keeps us positive on the group for 2026," Thomas said.

-Steve Gelsi

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April 25, 2025 07:50 ET (11:50 GMT)

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