Lowes Companies Inc

LOW

Retail-Lumber & Other Building Materials Dealers

Mkt Cap

$125.4B

PE

16.28

Debt

$36.46B

Cash

$921M

EV

$161B

FCF

$6.176B

Market Cap

$125.4B

P/E Ratio

16.28

Debt

$36.46B

Cash

$921M

EV

$161B

FCF

$6.176B

Charts data: {"Earnings":[{"time":"2015-01-29","value":2682000000},{"time":"2016-01-28","value":2534000000},{"time":"2017-02-02","value":3062000000},{"time":"2018-02-01","value":3436000000},{"time":"2019-01-31","value":2307000000},{"time":"2020-01-30","value":4268000000},{"time":"2021-01-28","value":5811000000},{"time":"2022-01-27","value":8409000000},{"time":"2023-02-02","value":6416000000},{"time":"2024-02-01","value":7706000000}],"Sales":[{"time":"2015-01-29","value":56223000000},{"time":"2016-01-28","value":59074000000},{"time":"2017-02-02","value":65017000000},{"time":"2018-02-01","value":68619000000},{"time":"2019-01-31","value":71309000000},{"time":"2020-01-30","value":72148000000},{"time":"2021-01-28","value":89597000000},{"time":"2022-01-27","value":96250000000},{"time":"2023-02-02","value":97059000000},{"time":"2024-02-01","value":86377000000}],"Net Margins":[{"time":"2015-01-29","value":0.04770289739074756},{"time":"2016-01-28","value":0.04289535159291736},{"time":"2017-02-02","value":0.047095375055754646},{"time":"2018-02-01","value":0.05007359477695682},{"time":"2019-01-31","value":0.03235215751167454},{"time":"2020-01-30","value":0.05915617896545989},{"time":"2021-01-28","value":0.06485708226837952},{"time":"2022-01-27","value":0.08736623376623377},{"time":"2023-02-02","value":0.06610412223492927},{"time":"2024-02-01","value":0.0892135637959179}],"Assets":[{"time":"2015-01-29","value":31827000000},{"time":"2016-01-28","value":31266000000},{"time":"2017-02-02","value":34408000000},{"time":"2018-02-01","value":35291000000},{"time":"2019-01-31","value":34508000000},{"time":"2020-01-30","value":39471000000},{"time":"2021-01-28","value":46735000000},{"time":"2022-01-27","value":44640000000},{"time":"2023-02-02","value":43708000000},{"time":"2024-02-01","value":41795000000}],"Stockholders Equity":[{"time":"2015-01-29","value":9968000000},{"time":"2016-01-28","value":7654000000},{"time":"2017-02-02","value":6434000000},{"time":"2018-02-01","value":5873000000},{"time":"2019-01-31","value":3644000000},{"time":"2020-01-30","value":1972000000},{"time":"2021-01-28","value":1437000000},{"time":"2022-01-27","value":-4816000000},{"time":"2023-02-02","value":-14254000000},{"time":"2024-02-01","value":-15050000000}],"ROE":[{"time":"2015-01-29","value":0.2690609951845907},{"time":"2016-01-28","value":0.33106872223673894},{"time":"2017-02-02","value":0.4759092322039167},{"time":"2018-02-01","value":0.5850502298654862},{"time":"2019-01-31","value":0.6330954994511526},{"time":"2020-01-30","value":2.1643002028397564},{"time":"2021-01-28","value":4.04384133611691},{"time":"2022-01-27","value":-1.7460548172757475},{"time":"2023-02-02","value":-0.45011926476778447},{"time":"2024-02-01","value":-0.5120265780730897}],"ROA":[{"time":"2015-01-29","value":0.15056398655229836},{"time":"2016-01-28","value":0.158990596814431},{"time":"2017-02-02","value":0.1699023482910951},{"time":"2018-02-01","value":0.18661981808393074},{"time":"2019-01-31","value":0.11643676828561493},{"time":"2020-01-30","value":0.15996554432368068},{"time":"2021-01-28","value":0.20641917192682144},{"time":"2022-01-27","value":0.2709005376344086},{"time":"2023-02-02","value":0.23242884597785302},{"time":"2024-02-01","value":0.2765163297045101}]}

Lowe's Companies, Inc., together with its subsidiaries, operates as a home improvement retailer in the United States. The company offers a line of products for construction, maintenance, repair, remodeling, and decorating. It also provides home improvement products, such as appliances, seasonal and outdoor living, lawn and garden, lumber, kitchens and bath, tools, paint, millwork, hardware, flooring, rough plumbing, building materials, décor, and electrical. In addition, the company offers installation services through independent contractors in various product categories; and extended protection plans and repair services. It sells its national brand-name merchandise and private brand products to professional customers, homeowners, and renters. The company also sells its products through Lowes.com website; and through mobile applications. Lowe's Companies, Inc. was founded in 1921 and is based in Mooresville, North Carolina.

Sector

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2/2/18

DCF

Discounted Cash Flow Valuation of Lowes Companies Inc

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$6.176B	$6.692B	$7.225B	$7.775B	$8.337B	$8.909B	$9.487B	$10.07B	$10.65B	$11.22B	$11.78B	$117.8B
DCF		$5.819B	$5.463B	$5.112B	$4.767B	$4.429B	$4.102B	$3.785B	$3.48B	$3.189B	$2.912B	$29.12B
Value	$72.17B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 16%

Earnings Stability 75%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	01-2016	02-2017	02-2018	01-2019	01-2020	01-2021	01-2022	02-2023	02-2024	TTM
Net Margin	4.3%	4.7%	5%	3.2%	5.9%	6.5%	8.7%	6.6%	8.9%	8.9%
ROA	16%	17%	19%	12%	16%	21%	27%	23%	28%	28%
ROE	33%	48%	59%	63%	220%	400%	-170%	-45%	-51%	-51%

What is the average Net Margin?

The average Net Margin over the past 5 years is +6.65%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +0.94%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +21.04%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +3.09%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +68.88%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -55.31%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	01-2016	02-2017	02-2018	01-2019	01-2020	01-2021	01-2022	02-2023	02-2024	TTM
Debt FCF	3.81	3.59	4.31	3.31	6.87	2.47	3.10	5.04	5.90	5.90
Debt Equity	1.79	2.48	2.89	4.56	9.79	15.93	-5.31	-2.39	-2.42	-2.42
MIN
Graham Stability	-	-	100%	77%	100%	100%	100%	100%	100%	77%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 5.90.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 0.23.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.77.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has been increasing in past years.

Years	02-2017	01-2019	01-2021	02-2023	Trend
Revenue	4.1%	3.9%	-1.2%	-11%	-1.1%
Net Income	14%	27%	9.9%	20%	1.7%
Stockholders Equity	-	-	-	-	-4%
FCF	4.8%	4.2%	-13%	-8.6%	1.5%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +3.91%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is -1.13%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +27.28%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +1.71%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is -.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -3.96%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +4.24%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +1.46%.