Lowe's Companies, Inc. (LOW) Stock Valuation — PE Analysis
Home Improvement · NYSE
Current Price
$220.78
PE Ratio (TTM)
18.6x
Intrinsic Value
$253.29
+12.8% margin of safety
COMPETITIVE MOAT
↑Loyal Customer Base & Brand Recognition
Lowe's benefits from a strong brand built over decades, fostering customer loyalty. This recognition drives repeat business and makes it a go-to destination for home improvement needs.
↑Extensive Store Network & Supply Chain
A vast physical footprint across North America provides convenient access for customers. This network is supported by an efficient supply chain, ensuring product availability and competitive pricing.
↑Growing Services & Subscription Revenue
Initiatives like home maintenance programs aim to create recurring revenue streams. This diversification into services enhances customer stickiness and offers new avenues for growth beyond product sales.
INVESTMENT RISKS
↓Intense Retail Competition
Lowe's faces fierce competition from other home improvement retailers and online giants. This pressure can impact market share and necessitate aggressive pricing strategies.
↓Housing Market Sensitivity
The company's performance is closely tied to the health of the housing market. Downturns in new construction and home sales can significantly reduce consumer spending on home improvement projects.
↓Economic Downturns & Consumer Spending
Discretionary spending on home improvement is vulnerable during economic slowdowns. Consumers may postpone projects, impacting Lowe's sales and profitability.
Base case
LOW base case PE valuation
A base case PE valuation for LOW estimates a fair value of about $253.29 per share, against a current price of $220.78. The model assumes 7.2% annual earnings growth, a 19x target PE multiple, and a 10% discount rate.
Intrinsic Value
$253.29
Margin of safety
+12.8%
Expected annual return
+2.8%
Base case assumptions: 7.2% annual earnings growth, 19x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the LOW PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Lowe's Companies, Inc. respond.
Open PE Calculator for LOWCompany Overview
Lowe's Companies, Inc., together with its various subsidiary entities, operates as a prominent home improvement retailer serving both the United States and international markets. The company supplies a broad spectrum of items essential for construction, upkeep, renovations, and interior design projects. Its comprehensive product line encompasses major appliances, seasonal and outdoor living essentials, lawn and garden tools, timber, kitchen and bathroom fixtures, power tools, paints, custom millwork, general hardware, flooring options, plumbing components, building materials, decorative accents, lighting solutions, and electrical supplies. In addition to merchandise, Lowe's facilitates installation services through independent contractors across numerous product categories, offers extended protection plans, and provides repair services covering both warranty and post-warranty issues. The company markets its inventory, comprising both well-known national brands and proprietary private-label items, to a diverse clientele including individual homeowners, tenants, and trade professionals. As of January 28, 2022, Lowe's operated 1,971 retail locations dedicated to home improvement and hardware. Products are also accessible via its e-commerce platforms, Lowes.com and Lowesforpros.com, and through its mobile applications. Established in 1921, Lowe's Companies, Inc. maintains its headquarters in Mooresville, North Carolina.
Financial Metrics — LOW PE Stock Valuation Data
PE Ratio (TTM)
18.6x
PEG Ratio
n/m
Earnings Yield
5.38%
ROE (TTM)
-64.8%
Revenue/Share (TTM)
$158.20
Dividend Yield
2.17%
Debt/Equity
n/m
Frequently Asked Questions
What is the PE ratio of LOW?
The trailing twelve-month PE ratio of LOW reflects how much investors pay per dollar of Lowe's Companies, Inc.'s earnings. This metric is most useful when compared to Home Improvement peers and the company's own historical range.
Is LOW overvalued based on PE ratio?
LOW's PE of 18.6x combined with a PEG ratio of -8.65 provides a growth-adjusted perspective. LOW has negative earnings, so its PE and PEG ratios are not meaningful here and cannot tell you whether the stock is over or undervalued. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Home Improvement, a DCF analysis may be more appropriate.
How do I value LOW stock using PE ratio?
To value Lowe's Companies, Inc. using PE: (1) Compare the current PE (18.6x) against the Home Improvement median to assess relative pricing, (2) check the PEG ratio (-8.65) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of LOW?
LOW's PEG ratio is -8.65, calculated by dividing the PE ratio (18.6x) by the expected earnings growth rate. Because LOW has negative earnings, its PEG ratio is not meaningful and should not be read as a sign of under or overvaluation. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for LOW stock valuation?
PE ratio gives a quick relative read — how LOW is priced versus Home Improvement peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See LOW DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Consumer Cyclical valuationsP/E and DCF value LOW with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.