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Lowe's Companies Inc LOW

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Stock XNYS Rating as of
$215.98 −1.36 (0.63%)
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As of Cboe BZX Real-Time Price Open
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Company Report

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Wide-Moat Lowe's' Focus on Retail Fundamentals Should Ensure Its Competitive Strength Endures

Jaime M Katz, Grace Na

Lowe's is the second-largest home improvement retailer globally, set to capture around $84 billion in sales in fiscal 2024. With continued focus on retail fundamentals (merchandising, operational efficiency, supply chain improvements, omnichannel shopping experience, and customer engagement), Lowe's has been able to better leverage costs while maintaining its low-cost position. The firm retains some of the cost savings and passes the rest on to its customers through everyday low prices, creating a flywheel effect. Intangible asset and scale-based cost advantage support our wide moat rating.

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Price vs Fair Value

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LOW is trading at a 675% premium.
Price
$217.48
Fair Value
$289.00
Uncertainty
Medium
1-Star Price
$188.79
5-Star Price
$514.10
Economic Moat
Mcqjg
Capital Allocation
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Bulls Say, Bears Say

Bulls

The divestiture of dilutive Canadian business structurally lifted Lowe's profitability profile. With continued focus on extracting inefficiencies, Lowe's is set to reach midteens operating margin longer term.

Bears

The closure of smaller peers may intermittently lead to competitive pricing pressures at Lowe's, constraining ROIC expansion and limiting sales growth.

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Trading Information

Previous Close Price
$217.34
Day Range
$215.85–218.26
52-Week Range
$181.85–262.34
Bid/Ask
$215.96 / $216.01
Market Cap
$123.58 Bil
Volume/Avg
1.1 Mil / 2.4 Mil

Key Statistics

Price/Earnings (Normalized)
16.65
Price/Sales
1.47
Dividend Yield (Trailing)
2.02%
Dividend Yield (Forward)
2.02%
Total Yield
5.91%

Company Profile

Lowe's is the second-largest home improvement retailer in the world, operating more than 1,700 stores in the United States, after the 2023 divestiture of its Canadian locations (RONA, Lowe’s Canada, Réno-Dépôt, and Dick’s Lumber). The firm’s stores offer products and services for home decorating, maintenance, repair, and remodeling, with maintenance and repair accounting for two thirds of products sold. Lowe's targets retail do-it-yourself (around 75% of sales) and do-it-for-me customers as well as commercial and professional business clients (around 25% of sales). We estimate Lowe's captures a high-single-digit share of the domestic home improvement market, based on U.S. Census data and management’s market size estimates.
Sector
Consumer Cyclical
Industry
Home Improvement Retail
Stock Style Box
Large Value
Total Number of Employees
284,000
Website
https://www.lowes.com

Competitors

Valuation

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Metric
LOW
HD
WMT
Price/Earnings (Normalized)
 16.6521.6829.51
Price/Book Value
 —184.136.47
Price/Sales
 1.472.220.80
Price/Cash Flow
 12.5817.8415.16
Price/Earnings
LOW
HD
WMT

Financial Strength

Metric
LOW
HD
WMT
Quick Ratio
 0.060.340.20
Current Ratio
 1.231.340.83
Interest Coverage
 7.7910.868.94
Quick Ratio
LOW
HD
WMT

Profitability

Metric
LOW
HD
WMT
Return on Assets (Normalized)
 18.05%19.73%6.48%
Return on Equity (Normalized)
 —1,265.26%20.75%
Return on Invested Capital (Normalized)
 35.63%32.05%12.00%
Return on Assets
LOW
HD
WMT
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