Home Improvement · NYSE
Current Price
$233.51
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Lowe's Companies, Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Lowe's Companies, Inc., together with its subsidiaries, operates as a home improvement retailer in the United States and internationally. The company offers a line of products for construction, maintenance, repair, remodeling, and decorating. It 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, decor, lighting, and electrical. It also offers installation services through independent contractors in various product categories; extended protection plans; and in-warranty and out-of-warranty repair services. The company sells its national brand-name merchandise and private brand products to homeowners, renters, and professional customers. As of January 28, 2022, it operated 1,971 home improvement and hardware stores. The company also sells its products through websites comprising Lowes.com and Lowesforpros.com; and through mobile applications. Lowe's Companies, Inc. was founded in 1921 and is based in Mooresville, North Carolina.
ROIC (TTM)
20.4%
ROE (TTM)
-59.2%
FCF Yield
5.85%
Based on trailing twelve-month data, LOW shows a free cash flow per share of N/A and a ROIC of 20.4%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 5.85% are important context metrics when evaluating LOW's stock valuation relative to peers.
The intrinsic value of LOW depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether LOW is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $233.51. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Lowe's Companies, Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Home Improvement industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting LOW's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Lowe's Companies, Inc., this means projecting how much free cash flow the Home Improvement will produce over the next 5-10 years, then discounting those amounts to today's dollars. LOW's ROIC of 20.4% indicates strong capital efficiency, which supports higher growth assumptions in the DCF model.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For LOW, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
