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1. Company Snapshot

1.a. Company Description

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, décor, 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.

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1.b. Last Insights on LOW

Lowe's Companies, Inc. faced negative drivers, including tepid guidance and mixed Q3 results. Despite a 0.4% year-over-year increase in comparable sales, the company's revenue of $20.8 billion was accompanied by a cautious outlook. Additionally, institutional investors such as Avantax Advisory Services Inc. and Arvest Bank Trust Division trimmed their stakes in the company. However, some investors, like 17 Capital Partners LLC and AlphaCore Capital LLC, increased their holdings. The company's adjusted operating margin expanded by approximately 10 basis points.

1.c. Company Highlights

2. Lowe's Companies Delivers Mixed Q3 Results Amidst Hurricanes and Macro Uncertainty

Lowe's Companies reported third-quarter sales of $20.8 billion, with comparable sales increasing 0.4% year-over-year, despite a 100 basis point headwind from Hurricanes Helene and Milton. Adjusted operating margin expanded 10 basis points, leading to adjusted diluted earnings per share of $3.06, a 6% increase from last year, beating analyst estimates of $2.97. The company's Total Home Strategy drove growth in small to medium Pro, online sales, and home services, with online sales growing 11.4% driven by increased traffic and conversion.

Publication Date: Nov -20

📋 Highlights
  • Sales Resilience with EPS Growth: Q3 sales hit $20.8B, with 0.4% comp increase despite hurricane headwinds; adjusted EPS rose 6% to $3.06.
  • Online and Home Services Surge: Online sales grew 11.4% (traffic/conversion), while home services delivered double-digit comp growth via tech-enabled solutions.
  • Strategic Acquisitions & AI Expansion: Completed FBM acquisition ($200M+ revenue potential) and launched AI framework, with MyLowe’s virtual assistants handling 1M+ monthly queries.
  • Margin Expansion and Cost Efficiency: Gross margin rose 50 bps to 34.2%, with adjusted SG&A at 19.6%; inventory reduced $400M YoY to $17.2B.
  • Pro Business Momentum: Small-to-medium Pro growth (75% job confidence), driven by Pro Rewards relaunch and FBM integration, contributing to 10/14 product category gains.

Segment Performance

The company delivered positive comps in 10 of its 14 merchandise divisions, with solid performance across both DIY and Pro. Notable categories included home decor, appliances, flooring, paint, and kitchens and bath. The Pro business saw stable growth in the small to medium Pro segment, with 75% of Pros confident in their job prospects.

Operational Efficiency and Cost Management

Lowe's CEO, Marvin Ellison, highlighted the company's focus on operating efficiency, citing a strong inventory shrink result and the implementation of perpetual productivity improvements or PPI initiatives in stores. The company's adjusted SG&A was 19.6% of sales, and its inventory ended Q3 at $17.2 billion, down approximately $400 million versus the prior year.

Outlook and Guidance

The company updated its financial outlook, expecting comp sales to be roughly flat for the year, with sales of approximately $86 billion. It also expects full-year adjusted operating margin of approximately 12.1% and adjusted diluted earnings per share of approximately $12.25, representing a 2% growth over the prior year. Analysts estimate next year's revenue growth at 2.3%.

Valuation and Returns

With a P/E Ratio of 18.83 and an EV/EBITDA of 11.29, Lowe's valuation appears reasonable. The company's ROIC is 20.81%, indicating strong operational efficiency. However, the ROE is -55.04%, which may be a concern. The Dividend Yield is 2.06%, providing a relatively stable return for investors.

Acquisition and Integration

The company completed its acquisition of Foundation Building Materials (FBM) in October, expanding its product portfolio and enhancing its offering to Pro customers. The integration of FBM and ADG involves onboarding ADG onto FBM's ERP system, which is expected to drive growth and improve customer satisfaction.

3. NewsRoom

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Lowe's Companies, Inc. (LOW) Presents at Morgan Stanley Global Consumer & Retail Conference 2025 Transcript

Dec -02

Source: seekingalpha.com

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Beacon Pointe Advisors LLC Sells 3,204 Shares of Lowe’s Companies, Inc. $LOW

Dec -02

Source: defenseworld.net

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Brentview Investment Management LLC Sells 389 Shares of Lowe’s Companies, Inc. $LOW

Dec -01

Source: defenseworld.net

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Boston Family Office LLC Cuts Stake in Lowe’s Companies, Inc. $LOW

Dec -01

Source: defenseworld.net

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Black Friday 2025: 2 Retail Stocks That Louis Navellier Recommends This Holiday Season

Nov -27

Source: feeds.benzinga.com

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Advisors Asset Management Inc. Reduces Position in Lowe’s Companies, Inc. $LOW

Nov -26

Source: defenseworld.net

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LOWE'S TO PARTICIPATE IN MORGAN STANLEY GLOBAL CONSUMER & RETAIL CONFERENCE

Nov -25

Source: prnewswire.com

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These 3 Housing Stocks Are Laying the Foundation for a Comeback

Nov -25

Source: marketbeat.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.10%)

6. Segments

Home Improvement Operations

Expected Growth: 1.1%

The 1.1% growth rate is based on the global revenue growth hypothesis. Home Improvement Operations, being the core business, is expected to follow the overall company growth trend, driven by steady demand for home improvement products, and Lowe's continued efforts to enhance customer experience and expand its online presence.

7. Detailed Products

Lumber

Lowe's offers a wide range of lumber products, including dimensional lumber, plywood, oriented strand board (OSB), and pressure-treated lumber.

Building Materials

Lowe's provides a variety of building materials, including drywall, roofing materials, insulation, and siding.

Kitchen and Bath Fixtures

Lowe's offers a wide selection of kitchen and bath fixtures, including sinks, faucets, toilets, and shower systems.

Appliances

Lowe's sells a range of appliances, including refrigerators, ovens, dishwashers, and washing machines.

Paint and Decorating

Lowe's offers a variety of paint, stains, and decorating supplies, including brushes, rollers, and painting tools.

Lawn and Garden

Lowe's provides a range of lawn and garden products, including seeds, fertilizers, and gardening tools.

Tools and Hardware

Lowe's sells a variety of tools and hardware, including power tools, hand tools, and fasteners.

Smart Home and Security

Lowe's offers a range of smart home and security products, including thermostats, security cameras, and door locks.

Plumbing and Water Heaters

Lowe's provides a variety of plumbing and water heater products, including pipes, fittings, and water heater systems.

8. Lowe's Companies, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Lowe's faces moderate threat from substitutes, as customers can opt for alternative home improvement retailers or online marketplaces. However, the company's strong brand presence and wide product offerings mitigate this threat to some extent.

Bargaining Power Of Customers

Lowe's customers have relatively low bargaining power due to the company's large scale and diversified product offerings. Additionally, the home improvement retail market is highly competitive, which reduces customers' ability to negotiate prices.

Bargaining Power Of Suppliers

Lowe's suppliers have moderate bargaining power due to the company's dependence on a few large suppliers for certain products. However, Lowe's large scale and diversified supplier base mitigate this threat to some extent.

Threat Of New Entrants

The threat of new entrants is low in the home improvement retail market due to high barriers to entry, including significant capital requirements and the need for a large scale of operations to achieve economies of scale.

Intensity Of Rivalry

The home improvement retail market is highly competitive, with Lowe's facing intense rivalry from Home Depot and other smaller players. This competition leads to high marketing and advertising expenses, as well as pressure to maintain low prices.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 171.89%
Debt Cost 4.87%
Equity Weight -71.89%
Equity Cost 9.67%
WACC 1.41%
Leverage -239.11%

11. Quality Control: Lowe's Companies, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Booking

A-Score: 6.3/10

Value: 3.8

Growth: 8.7

Quality: 8.0

Yield: 1.0

Momentum: 7.5

Volatility: 8.7

1-Year Total Return ->

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PulteGroup

A-Score: 5.8/10

Value: 5.9

Growth: 8.8

Quality: 7.6

Yield: 2.0

Momentum: 4.0

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Lowe's

A-Score: 5.6/10

Value: 5.7

Growth: 6.7

Quality: 5.5

Yield: 4.0

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

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Lennar

A-Score: 5.4/10

Value: 7.5

Growth: 7.2

Quality: 7.1

Yield: 3.0

Momentum: 1.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Home Depot

A-Score: 5.3/10

Value: 2.4

Growth: 6.0

Quality: 5.5

Yield: 4.0

Momentum: 4.0

Volatility: 10.0

1-Year Total Return ->

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Haverty Furniture

A-Score: 4.8/10

Value: 3.9

Growth: 3.4

Quality: 3.8

Yield: 9.0

Momentum: 3.0

Volatility: 5.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

246.74$

Current Price

246.74$

Potential

0.00%

Expected Cash-Flows