LOW Lowe's Companies, Inc. - Fundamental Analysis
NEUTRAL
LOW Stock | Fundamental Analysis & Investment Insights
NYSE
•
Consumer Cyclical
•
Home Improvement Retail
Current Price
$227.85
Analyst Target
$278.56
+22.3% Upside
52W High
$280.64
52W Low
$206.39
AI Analysis
Powered by advanced machine learning algorithms
Confidence Score
72%
Analysis Accuracy
Lowe's (LOW) trades at a reasonable valuation relative to its fundamentals and peers, supported by consistent profitability and a healthy dividend yield of 2.11%. However, near-term revenue growth is muted at just 1.6% YoY, and insider selling activity over the past six months—totaling $25.55M—raises caution despite strong historical earnings execution. The stock has underperformed over the past year (-14.0%) amid broader consumer cyclicality pressures, though it remains well below the analyst target price of $278.56, implying ~22% upside. Relative to the Consumer Cyclical sector, LOW appears undervalued on a P/E basis (18.69 vs. sector avg 68.68), but lags in growth metrics, particularly against high-fliers like XPeng and even Nike.
Key Strengths
Consistent earnings beat streak: 3 out of last 4 quarters beat estimates with an average surprise of 2.81%, demonstrating reliable execution.
Strong profitability: 14.48% operating margin and 14.29% ROA exceed sector averages and peer levels, indicating efficient operations.
Attractive dividend profile: 2.11% yield with a sustainable 38.15% payout ratio, offering income appeal in a low-growth environment.
Valuation discount to sector: P/E of 18.69 vs. sector average of 68.68, providing downside protection and potential re-rating catalyst if growth stabilizes.
Solid free cash flow generation (implied by dividend coverage and historical consistency), enabling buybacks and debt management.
Key Risks
Anemic revenue growth: 1.6% YoY revenue growth reflects weakening DIY/DIY demand, likely due to housing market headwinds and higher interest rates.
Bearish insider activity: Six insider sales in the last six months, including CEO and CFO, suggest lack of confidence at the top despite no buys.
Negative Price/Book ratio (-11.21): Indicates accumulated losses or aggressive buybacks exceeding book value, raising balance sheet concerns.
Underperformance in price momentum: -14.0% 1Y return vs. sector volatility, with recent 6M and 1M declines signaling weak sentiment.
Liquidity risk: Very low quick ratio of 0.24 suggests limited ability to meet short-term obligations without inventory liquidation.
AI Fair Value Estimate
Based on comprehensive analysis
$265.0
+16.3% above current price
Performance Snowflake
Multi-dimensional AI analysis across 5 key categories
Stock Price & Analyst Targets
Real-time price movements and analyst price targets
Historical Performance Trends
Long-term financial metrics and growth patterns
Valuation Metrics
Key valuation ratios and pricing indicators
Profitability, Growth & Financial Health
Detailed profit margins, ROE, debt ratios, and liquidity metrics
Sector Comparison & Peer Analysis
Compare LOW against industry averages and similar companies
Insider Trading & Analyst Ratings
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