DCF Tool

LOW

Lowe`s Cos., Inc. – Home Centers
Lowe's Companies, Inc. (NYSE: LOW) is a FORTUNEĀ® 50 home improvement company serving approximately 18 million customers a week in the United States and Canada. With fiscal year 2019 sales of $72.1 billion, Lowe's and its related businesses operate or service more than 2,200 home improvement and hardware stores and employ approximately 300,000 associates. Based in Mooresville, N.C., Lowe's supports the communities it serves through programs focused on creating safe, affordable housing and helping to develop the next generation of skilled trade experts.
Analysis Results
Intrinsic Value $337.08
Latest Price $187.81
Relative Value 44% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 13.8%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 7.6%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 13.8%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2023 8.33 7.74
2024 9.48 8.19
2025 10.8 8.67
2026 12.3 9.17
2027 14.0 9.71
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 257 billion. This corresponds to a present value of 166 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 43.5 billion. Adding in the terminal value gives a total present value of 209 billion.

There are presently 621.0 million outstanding shares, so the intrinsic value per share is 337.08.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 20,060,000,000
Current Cash 1,404,000,000
Current Liabilities 19,668,000,000
Current Debt 868,000,000
Non-Cash Working Capital (NCWC) -144,000,000
Change in NCWC 344,000,000
EBIT 12,093,000,000
Tax Provision 2,766,000,000
Depreciation and Amortization 1,882,000,000
Capital Expenditure -1,853,000,000
Unlevered Free Cash Flow 9,481,592,612
Current Assets 22,326,000,000
Current Cash 5,196,000,000
Current Liabilities 18,730,000,000
Current Debt 1,112,000,000
Non-Cash Working Capital (NCWC) -488,000,000
Change in NCWC -2,286,000,000
EBIT 9,647,000,000
Tax Provision 1,904,000,000
Depreciation and Amortization 1,594,000,000
Capital Expenditure -1,791,000,000
Unlevered Free Cash Flow 4,790,581,212
Current Assets 15,318,000,000
Current Cash 876,000,000
Current Liabilities 15,182,000,000
Current Debt 2,538,000,000
Non-Cash Working Capital (NCWC) 1,798,000,000
Change in NCWC 746,000,000
EBIT 6,314,000,000
Tax Provision 1,342,000,000
Depreciation and Amortization 1,410,000,000
Capital Expenditure -1,484,000,000
Unlevered Free Cash Flow 5,479,084,118
Current Assets 14,228,000,000
Current Cash 511,000,000
Current Liabilities 14,497,000,000
Current Debt 1,832,000,000
Non-Cash Working Capital (NCWC) 1,052,000,000
Change in NCWC -451,000,000
EBIT 4,018,000,000
Tax Provision 1,080,000,000
Depreciation and Amortization 1,607,000,000
Capital Expenditure -1,174,000,000
Unlevered Free Cash Flow 2,721,437,831
Current Assets 12,772,000,000
Current Cash 604,000,000
Current Liabilities 12,096,000,000
Current Debt 1,431,000,000
Non-Cash Working Capital (NCWC) 1,503,000,000
Change in NCWC 749,000,000
EBIT 6,586,000,000
Tax Provision 2,042,000,000
Depreciation and Amortization 1,540,000,000
Capital Expenditure -1,123,000,000
Unlevered Free Cash Flow 5,301,897,613
Current Assets 12,000,000,000
Current Cash 577,000,000
Current Liabilities 11,974,000,000
Current Debt 1,305,000,000
Non-Cash Working Capital (NCWC) 754,000,000
Change in NCWC 59,000,000
EBIT 5,846,000,000
Tax Provision 2,108,000,000
Depreciation and Amortization 1,590,000,000
Capital Expenditure -1,167,000,000
Unlevered Free Cash Flow 3,958,577,196
Current Assets 10,561,000,000
Current Cash 478,000,000
Current Liabilities 10,492,000,000
Current Debt 1,104,000,000
Non-Cash Working Capital (NCWC) 695,000,000
Change in NCWC 2,000,000
EBIT 4,971,000,000
Tax Provision 1,873,000,000
Depreciation and Amortization 1,587,000,000
Capital Expenditure -1,197,000,000
Unlevered Free Cash Flow 3,256,033,944
Current Assets 10,080,000,000
Current Cash 591,000,000
Current Liabilities 9,348,000,000
Current Debt 552,000,000
Non-Cash Working Capital (NCWC) 693,000,000
Change in NCWC -586,000,000
EBIT 4,792,000,000
Tax Provision 1,578,000,000
Depreciation and Amortization 1,586,000,000
Capital Expenditure -880,000,000
Unlevered Free Cash Flow 3,143,577,174
Current Assets 10,296,000,000
Current Cash 576,000,000
Current Liabilities 8,876,000,000
Current Debt 435,000,000
Non-Cash Working Capital (NCWC) 1,279,000,000
Change in NCWC -178,000,000
EBIT 4,149,000,000
Tax Provision 1,387,000,000
Depreciation and Amortization 1,562,000,000
Capital Expenditure -940,000,000
Unlevered Free Cash Flow 3,026,252,654
Current Assets 9,784,000,000
Current Cash 666,000,000
Current Liabilities 7,708,000,000
Current Debt 47,000,000
Non-Cash Working Capital (NCWC) 1,457,000,000
Change in NCWC -16,000,000
EBIT 3,560,000,000
Tax Provision 1,178,000,000
Depreciation and Amortization 1,623,000,000
Capital Expenditure -1,211,000,000
Unlevered Free Cash Flow 2,619,155,881

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