* Note: Prices are in Million (M) USD.
Description:
Lowe's Companies, Inc. is an American retail company specializing in home improvement. Headquartered in Mooresville, North Carolina, the company operates a chain of retail stores in the United States and Canada.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $1,761 M
Debt : $39,678 M
EBITDA : $12,477 M
Net Debt (Debt - Cash): $37,917 M
Since Net Debt is covered by EBITDA within 3 years, 1 points assigned.
This criteria used industry in which company operates:
Sector: Consumer cyclical
Industry: Home improvement stores
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 20.12
Since Forward PE Ratio is between 20 - 25, 2 points assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 20 overlapping fiscal years (max 20).Average Free Cash Flow: $3,864 M
Average Revenue: $64,111 M
Revenue Converted To Free Cash Flow (%): 6.0%
Since Free Cash Flow (FCF) to Revenue percentage is less than 15, 1 point assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2025-01-31): $83,674 M
Revenue 4 Years Ago (2021-01-31): $89,597 M
Last 5 Years Average Revenue Growth: -1%
Since Revenue Growth is between 0 - 5, 1 point assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2025-01-31): $567 M
Share Count 5 Years Ago (2021-01-31): $750 M
Company is buying back its own shares, 3 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $13.30
Trailing 12-Month Earnings Per Share (EPS): $12.30
Average Earnings Per Share (EPS): $12.80
Dividend Per Share (DPS): $5
Payout Ratio: 36%
Dividend Yield: 2%
Since company Payout Ratio is less than 50, 2 points assigned.
Since Dividend Yield is greater than 1, 1 point assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 16 valid ROE years (max 20).Average ROE: 61.7%
Since Average ROE is greater than 20, 5 points assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $258
52-Week Low: $204
Threshold Price (15% Above 52-Week Low): $235
Since Current price is not within 15% threshold, 0 point assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $134,421 M
Since Market Cap is between 100B - 500B, 3 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 4% exposure of Total Portfolio.
Value-Trade has assigned 22 points to above Lowe's Companies Inc (LOW) stock.
Heads up: One or more P/E inputs look exaggerated and may skew the blend.
• ROE Based PE
50.00 (>2× median)
Further research is recommended; please use your own due diligence.In such cases, multiplying earnings by the long-run average P/E typically gives a closer, more reliable fair value.
Rule of thumb: Last 20 Years Avg P/E (22.58)
× EPS ($12.80) = $289.02.
Last 20 Years Avg PE 22.58, Fair Value PE 15, Industry Based PE 20, RCFC Based PE 14.82, ROE Based PE 50, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 6 values, average assigned is 23.25. Value-Trades has assined P/E value 23.25. Since an average (Current Year EPS + Next Year EPS) earning per share is $12.8.
The fair value of Lowe's Companies Inc (LOW) stock should be (23.25 x $12.8) = $297.57.
