LOWE'S COS INC (LOW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:LOW - US5486611073 - Common Stock
242.48 USD
+0.87 (+0.36%)
242.49 USD
0.01 (0%)
We assign a fundamental rating of 6 out of 10 to LOW. LOW was compared to 122 industry peers in the Specialty Retail industry. LOW scores excellent on profitability, but there are some minor concerns on its financial health. LOW has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
LOW had positive earnings in the past year.
LOW had a positive operating cash flow in the past year.
LOW had positive earnings in each of the past 5 years.
Each year in the past 5 years LOW had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 12.65%, LOW belongs to the top of the industry, outperforming 87.70% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 22.95%, LOW belongs to the top of the industry, outperforming 90.98% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for LOW is significantly above the industry average of 11.71%.
The 3 year average ROIC (32.20%) for LOW is well above the current ROIC(22.95%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.65% | ||
| ROE | N/A | ||
| ROIC | 22.95% |
ROA(3y)16.41%
ROA(5y)16.1%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)32.2%
ROIC(5y)32.68%
1.3 Margins
LOW has a Profit Margin of 8.02%. This is amongst the best in the industry. LOW outperforms 84.43% of its industry peers.
In the last couple of years the Profit Margin of LOW has grown nicely.
With an excellent Operating Margin value of 12.19%, LOW belongs to the best of the industry, outperforming 86.89% of the companies in the same industry.
LOW's Operating Margin has improved in the last couple of years.
With a Gross Margin value of 33.59%, LOW perfoms like the industry average, outperforming 43.44% of the companies in the same industry.
In the last couple of years the Gross Margin of LOW has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.19% | ||
| PM (TTM) | 8.02% | ||
| GM | 33.59% |
OM growth 3Y-1.15%
OM growth 5Y6.8%
PM growth 3Y-1.72%
PM growth 5Y6.99%
GM growth 3Y0.01%
GM growth 5Y0.94%
2. Health
2.1 Basic Checks
LOW has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
LOW has less shares outstanding than it did 1 year ago.
LOW has less shares outstanding than it did 5 years ago.
LOW has a better debt/assets ratio than last year.
2.2 Solvency
LOW has an Altman-Z score of 3.21. This indicates that LOW is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.21, LOW is in the better half of the industry, outperforming 78.69% of the companies in the same industry.
The Debt to FCF ratio of LOW is 5.66, which is a neutral value as it means it would take LOW, 5.66 years of fcf income to pay off all of its debts.
LOW's Debt to FCF ratio of 5.66 is fine compared to the rest of the industry. LOW outperforms 66.39% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.66 | ||
| Altman-Z | 3.21 |
ROIC/WACC2.58
WACC8.9%
2.3 Liquidity
A Current Ratio of 1.04 indicates that LOW should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.04, LOW is doing worse than 71.31% of the companies in the same industry.
LOW has a Quick Ratio of 1.04. This is a bad value and indicates that LOW is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.16, LOW is doing worse than 91.80% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.04 | ||
| Quick Ratio | 0.16 |
3. Growth
3.1 Past
LOW shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.55%.
LOW shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.93% yearly.
The Revenue has been growing slightly by 0.64% in the past year.
The Revenue has been growing slightly by 3.01% on average over the past years.
EPS 1Y (TTM)3.55%
EPS 3Y0.03%
EPS 5Y15.93%
EPS Q2Q%5.88%
Revenue 1Y (TTM)0.64%
Revenue growth 3Y-4.56%
Revenue growth 5Y3.01%
Sales Q2Q%3.19%
3.2 Future
Based on estimates for the next years, LOW will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.04% on average per year.
Based on estimates for the next years, LOW will show a small growth in Revenue. The Revenue will grow by 4.00% on average per year.
EPS Next Y3.86%
EPS Next 2Y6.12%
EPS Next 3Y5.88%
EPS Next 5Y8.04%
Revenue Next Year2.03%
Revenue Next 2Y4.12%
Revenue Next 3Y4.76%
Revenue Next 5Y4%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 19.81, LOW is valued on the expensive side.
Based on the Price/Earnings ratio, LOW is valued a bit cheaper than 73.77% of the companies in the same industry.
When comparing the Price/Earnings ratio of LOW to the average of the S&P500 Index (26.31), we can say LOW is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 17.97, the valuation of LOW can be described as rather expensive.
62.30% of the companies in the same industry are more expensive than LOW, based on the Price/Forward Earnings ratio.
LOW is valuated cheaply when we compare the Price/Forward Earnings ratio to 36.59, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.81 | ||
| Fwd PE | 17.97 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of LOW is on the same level as its industry peers.
LOW's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. LOW is cheaper than 73.77% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.3 | ||
| EV/EBITDA | 14.1 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates LOW does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of LOW may justify a higher PE ratio.
PEG (NY)5.14
PEG (5Y)1.24
EPS Next 2Y6.12%
EPS Next 3Y5.88%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.99%, LOW has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 6.02, LOW pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.40, LOW has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.99% |
5.2 History
On average, the dividend of LOW grows each year by 16.94%, which is quite nice.
LOW has been paying a dividend for at least 10 years, so it has a reliable track record.
LOW has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)16.94%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
38.65% of the earnings are spent on dividend by LOW. This is a low number and sustainable payout ratio.
LOW's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP38.65%
EPS Next 2Y6.12%
EPS Next 3Y5.88%
242.48
+0.87 (+0.36%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners79.12%
Inst Owner Change1.98%
Ins Owners0.09%
Ins Owner Change-2.66%
Market Cap136.03B
Revenue(TTM)84.26B
Net Income(TTM)6.76B
Analysts76.59
Price Target283.21 (16.8%)
Short Float %1.4%
Short Ratio2.99
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.99% |
Yearly Dividend4.53
Dividend Growth(5Y)16.94%
DP38.65%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.59%
Min EPS beat(2)1.03%
Max EPS beat(2)2.14%
EPS beat(4)4
Avg EPS beat(4)1.86%
Min EPS beat(4)0.49%
Max EPS beat(4)3.78%
EPS beat(8)8
Avg EPS beat(8)2.34%
EPS beat(12)11
Avg EPS beat(12)2.25%
EPS beat(16)15
Avg EPS beat(16)2.7%
Revenue beat(2)0
Avg Revenue beat(2)-1.01%
Min Revenue beat(2)-1.01%
Max Revenue beat(2)-1.01%
Revenue beat(4)1
Avg Revenue beat(4)-0.67%
Min Revenue beat(4)-1.02%
Max Revenue beat(4)0.35%
Revenue beat(8)3
Avg Revenue beat(8)-0.61%
Revenue beat(12)4
Avg Revenue beat(12)-0.72%
Revenue beat(16)6
Avg Revenue beat(16)-0.73%
PT rev (1m)-1.57%
PT rev (3m)1.5%
EPS NQ rev (1m)0.03%
EPS NQ rev (3m)0.6%
EPS NY rev (1m)0.02%
EPS NY rev (3m)0.21%
Revenue NQ rev (1m)2.35%
Revenue NQ rev (3m)3.98%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.81 | ||
| Fwd PE | 17.97 | ||
| P/S | 1.61 | ||
| P/FCF | 19.3 | ||
| P/OCF | 14.77 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.1 |
EPS(TTM)12.24
EY5.05%
EPS(NY)13.49
Fwd EY5.56%
FCF(TTM)12.57
FCFY5.18%
OCF(TTM)16.41
OCFY6.77%
SpS150.19
BVpS-18.51
TBVpS-36.29
PEG (NY)5.14
PEG (5Y)1.24
Graham NumberN/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.65% | ||
| ROE | N/A | ||
| ROCE | 30.22% | ||
| ROIC | 22.95% | ||
| ROICexc | 23.67% | ||
| ROICexgc | 33.95% | ||
| OM | 12.19% | ||
| PM (TTM) | 8.02% | ||
| GM | 33.59% | ||
| FCFM | 8.37% |
ROA(3y)16.41%
ROA(5y)16.1%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)32.2%
ROIC(5y)32.68%
ROICexc(3y)34.56%
ROICexc(5y)35.64%
ROICexgc(3y)34.87%
ROICexgc(5y)36.2%
ROCE(3y)42.67%
ROCE(5y)43.19%
ROICexgc growth 3Y-4.55%
ROICexgc growth 5Y12.84%
ROICexc growth 3Y-3.41%
ROICexc growth 5Y13.11%
OM growth 3Y-1.15%
OM growth 5Y6.8%
PM growth 3Y-1.72%
PM growth 5Y6.99%
GM growth 3Y0.01%
GM growth 5Y0.94%
F-Score6
Asset Turnover1.58
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.66 | ||
| Debt/EBITDA | 3.04 | ||
| Cap/Depr | 104.35% | ||
| Cap/Sales | 2.56% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 74.61% | ||
| Profit Quality | 104.28% | ||
| Current Ratio | 1.04 | ||
| Quick Ratio | 0.16 | ||
| Altman-Z | 3.21 |
F-Score6
WACC8.9%
ROIC/WACC2.58
Cap/Depr(3y)97.39%
Cap/Depr(5y)100.6%
Cap/Sales(3y)2.15%
Cap/Sales(5y)2.08%
Profit Quality(3y)98.81%
Profit Quality(5y)110.8%
High Growth Momentum
Growth
EPS 1Y (TTM)3.55%
EPS 3Y0.03%
EPS 5Y15.93%
EPS Q2Q%5.88%
EPS Next Y3.86%
EPS Next 2Y6.12%
EPS Next 3Y5.88%
EPS Next 5Y8.04%
Revenue 1Y (TTM)0.64%
Revenue growth 3Y-4.56%
Revenue growth 5Y3.01%
Sales Q2Q%3.19%
Revenue Next Year2.03%
Revenue Next 2Y4.12%
Revenue Next 3Y4.76%
Revenue Next 5Y4%
EBIT growth 1Y0.28%
EBIT growth 3Y-5.66%
EBIT growth 5Y10.02%
EBIT Next Year19.7%
EBIT Next 3Y10.57%
EBIT Next 5Y8.17%
FCF growth 1Y30.56%
FCF growth 3Y-2.32%
FCF growth 5Y22.21%
OCF growth 1Y23.05%
OCF growth 3Y-1.64%
OCF growth 5Y17.44%
LOWE'S COS INC / LOW FAQ
What is the fundamental rating for LOW stock?
ChartMill assigns a fundamental rating of 6 / 10 to LOW.
Can you provide the valuation status for LOWE'S COS INC?
ChartMill assigns a valuation rating of 5 / 10 to LOWE'S COS INC (LOW). This can be considered as Fairly Valued.
Can you provide the profitability details for LOWE'S COS INC?
LOWE'S COS INC (LOW) has a profitability rating of 8 / 10.
What is the valuation of LOWE'S COS INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for LOWE'S COS INC (LOW) is 19.81 and the Price/Book (PB) ratio is -13.1.
What is the financial health of LOWE'S COS INC (LOW) stock?
The financial health rating of LOWE'S COS INC (LOW) is 5 / 10.