Ackman's Pershing Sells $277M Lowe's Stake, Holds Google

Pershing Square exits $277.2 million stake in Lowe's amid challenging housing market, maintains diverse portfolio including Google.

By Alex P. Chase

5/16, 01:36 EDT
Chipotle Mexican Grill, Inc.
Alphabet Inc.
Home Depot, Inc.
Hilton Worldwide Holdings Inc.
Lowe's Companies, Inc.
Restaurant Brands International Inc.

Key Takeaway

  • Pershing Square Capital Management, led by Bill Ackman, has sold its entire stake in Lowe’s, valued at approximately $277.2 million.
  • The divestiture occurs as Lowe's faces a challenging market amid high mortgage rates and subdued U.S. housing activity.
  • Pershing maintains significant investments in Alphabet Inc., Restaurant Brands International, Chipotle Mexican Grill, and Hilton Worldwide Holdings.

Pershing Square Exits Lowe’s Stake

Bill Ackman’s Pershing Square Capital Management has fully divested its position in Lowe’s Cos., as revealed in a recent regulatory filing. The hedge fund had held approximately 1.2 million shares of the home-improvement retailer, with the stake valued at around $277.2 million by mid-February. This move comes ahead of Lowe’s scheduled earnings report next week.

Lowe’s, with a recent stock performance of +1.94%, finds itself navigating a challenging market environment. The U.S. housing market has been subdued, with 30-year fixed mortgage rates exceeding 7%, discouraging homeowners from selling or upgrading their homes despite rising property prices nationally. This trend has implications for home-improvement retailers like Lowe’s and its competitors.

Home Depot’s Performance and Market Context

In contrast to Lowe’s anticipated earnings report, Home Depot, a key competitor, recently reported its first-quarter results. Home Depot’s earnings surpassed profit estimates, although it experienced a decline in sales. However, the decline was less severe than anticipated, attributed in part to reduced spending on larger discretionary projects. This performance provides a comparative backdrop to Lowe’s situation, highlighting the broader challenges facing the home-improvement retail sector amid fluctuating U.S. home sales and consumer spending patterns.

Pershing’s Portfolio Adjustments

Aside from liquidating its Lowe’s shares, Pershing Square’s portfolio remained largely unchanged in the latest quarter. The hedge fund continues to hold significant positions in several major companies, including Alphabet Inc., the parent company of Google, with stock performances noted at GOOG, +1.13% and GOOGL, +1.27%. Other steady investments include Restaurant Brands International Inc., Chipotle Mexican Grill Inc., and Hilton Worldwide Holdings Inc., showcasing a diverse investment strategy across various sectors. These holdings reflect Pershing Square’s broader investment strategy and market outlook, beyond the specific exit from Lowe’s.