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Lowe's Companies Inc LOW

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Stock XNYS Rating as of
$202.70 +3.79 (1.91%)
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Company Report

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Near-Term Macro Headwinds Fail to Dampen Lowe's Leading Position in Home Improvement

Jaime M Katz, Grace Na

Lowe's is the second-largest home improvement retailer globally, set to capture around $87 billion in sales in fiscal 2023. With continued focus on retail fundamentals (merchandising excellence, 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. These competitive advantages support our wide economic moat rating.

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Price vs Fair Value

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LOW is trading at a 4% discount.
Price
$198.82
Fair Value
$674.00
Uncertainty
Medium
1-Star Price
$971.67
5-Star Price
$595.10
Economic Moat
Blk
Capital Allocation
Qllskzbwc

Bulls Say, Bears Say

Bulls

We forecast Lowe's to reach a 13.3% operating margin in 2023, after divesting the dilutive Canadian business and investing in productivity efforts.

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
$198.91
Day Range
$198.51–202.84
52-Week Range
$181.85–237.21
Bid/Ask
$202.61 / $202.77
Market Cap
$116.52 Bil
Volume/Avg
804,818 / 2.8 Mil

Key Statistics

Price/Earnings (Normalized)
14.70
Price/Sales
1.30
Dividend Yield
2.16%
Dividend Yield (Forward)
2.21%
Total Yield
9.10%

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 low-double-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 Core
Total Number of Employees
307,000
Website
https://www.lowes.com

Competitors

Valuation

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Metric
LOW
HD
WMT
Price/Earnings (Normalized)
 14.7020.1223.77
Price/Book Value
 —218.355.28
Price/Sales
 1.302.060.66
Price/Cash Flow
 11.0316.1213.94
Price/Earnings
LOW
HD
WMT

Financial Strength

Metric
LOW
HD
WMT
Quick Ratio
 0.070.250.20
Current Ratio
 1.211.300.85
Interest Coverage
 7.9911.859.75
Quick Ratio
LOW
HD
WMT

Profitability

Metric
LOW
HD
WMT
Return on Assets (Normalized)
 18.17%20.95%6.56%
Return on Equity (Normalized)
 —1,335.72%21.56%
Return on Invested Capital (Normalized)
 36.37%34.03%12.12%
Return on Assets
LOW
HD
WMT

Home Improvement Retail Industry Comparables

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Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
HD
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FND
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Kingfisher PLCNjzc$5.2 Bil
KGFHY
Kingfisher PLC ADRBjc$5.2 Bil
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Home Product Center PCL Shs Foreign registeredTfxzyx$4.5 Bil
FKRAF
Fiskars OyjWxxn$1.5 Bil
ARHS
Arhaus Inc Class ADchs$1.3 Bil