Lowe's (LOW) faces risks to 2026 numbers amid rising rates, consumer pressure, and cost inflation, RBC Capital Markets said in a Wednesday research report.

The brokerage said it lowered its Q2 adjusted EPS guidance to $4.24 and comp estimate to 0.5%. For 2026 and 2027, RBC now expects adjusted EPS of $12.35 and $12.87, respectively, from $12.59 and $13.20 earlier.

In Q1, comp trends by month were choppy due to winter storms, but trends improved and peaked in March, while April was said to be in-line with expectations, analysts wrote.

Overall, big ticket comps continue to accelerate, while the company's perpetual productivity improvement initiatives record greater benefit from AI, according to the note.

The company found efficiencies through the use of AI as new tools support demand planning, allocation and replenishment, as well as pricing and promotions, according to RBC.

The brokerage said it reiterated its sector perform rating on the stock and cut its price target to $232 per share from $264.

Price: 214.76, Change: -6.29, Percent Change: -2.85