Lowe's Companies, Inc. (LOW) DCF Valuation
Transparent DCF models put Lowe's Companies, Inc. (LOW)'s fair value in a range of $136.00 – $165.46 — the low end is TGM's conservative base case (5% FCF growth, 10% discount), the high end the analyst consensus (FMP). Today's price of $215.18 sits above that range — by these conservative assumptions it looks richly valued; the reverse-DCF below is the better lens for a high-growth name.
Reverse DCF: at today's $215.18, the market is pricing in roughly +9.4%/yr free-cash-flow growth over the next decade (at a 10% required return) — versus its actual 5-year FCF CAGR of -3.6%. The price is betting on acceleration above its track record.
Current Price
$215.18
Fair-Value Range
$136.00 – $165.46
Market-Implied Growth
+9.4%/yr
vs -3.6% 5Y actual
LOW DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Illustrative model — not investment advice. Defaults to a conservative base case; the analyst (FMP) DCF, where available, is shown as a reference below.
Base inputs: FCF $7.1B · 0.56B shares · net debt $39.7B
Estimated Fair Value
$136.00
-36.8% vs $215.18
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 5.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $215.18; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.0% | $186 | $199 | $215 | $234 | $256 |
| 9.0% | $150 | $159 | $169 | $181 | $196 |
| 10.0% | $122 | $129 | $136 | $144 | $154 |
| 11.0% | $101 | $105 | $111 | $116 | $123 |
| 12.0% | $83.15 | $86.68 | $90.58 | $94.91 | $99.75 |
About Lowe's Companies, Inc.
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.
- Sector
- Consumer Cyclical
- Industry
- Home Improvement
- CEO
- Marvin R. Ellison