Investing.com -- KeyBanc Capital Markets has upgraded Lowe’s (NYSE:LOW) and Williams-Sonoma (NYSE:WSM) to Overweight from Sector-Weight in a note Friday covering hardlines and broadlines stocks. 

The bank highlighted the recent stock pullbacks as compelling entry points for long-term investors.

 “We see buying opportunities for patient investors for these high-quality businesses,” analysts wrote, highlighting the companies’ balance sheets, cash flow generation, and valuation discounts.

The upgrades come amid a cautious short-term view shaped by tariff uncertainty. However, KeyBanc remains optimistic over the next two to three years. 

“These companies offer significant upside potential over a two- to three-year time horizon,” the analysts said, estimating potential gains of over 50%.

On Lowe’s, KeyBanc pointed to the retailer’s progress in expanding its Pro customer base through its acquisition of Artisan Design Group. 

“We are positive on this acquisition as it will build on LOW’s success with Pros and it will expand LOW’s TAM by ~$50B,” they said. 

The firm sees Lowe’s generating more than $5 billion in free cash flow in 2025 and believes its shares, currently down 22% from October highs, have room to recover. A 12-month price target of $266 implies 20% upside, with further gains possible as home improvement spending recovers.

For Williams-Sonoma, analysts praised the company’s digital strength and margin expansion. 

“Operating margins are structurally higher than pre-pandemic,” they wrote, noting improvements in supply chain, pricing, and cost control. 

They add that WSM, which sources 82% of its products overseas, has already factored in full tariff impacts. The firm sees the stock, currently down 31% from its peak, as undervalued. 

“We see potential for 60%+ upside in shares over two to three years,” they said, assigning a 12-month price target of $181.

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