LOW
Lowe's Companies, Inc.
$194.14
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 2.4% above fair value
You pay
$194.14
Bear
$165.90
Fair
$189.60
Bull
$213.30
Bear
$165.90
-14.5%
$11.85 × 14x P/E
Fair
$189.60
-2.3%
$11.85 × 16x P/E
Bull
$213.30
+9.9%
$11.85 × 18x P/E
Adjust Assumptions
16.0x
11.85$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
16.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (51 analysts)
$256.38
Divergence from AlphaVal
26%
Summary
Applying a 16x P/E to adjusted EPS of $11.85, the base-case value is $189.60 per share. DDM cross-check: $233.36.
Warnings
Dividend-based valuation: $233.36 (above our primary estimate by 23%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $256.38 (from 51 analysts). Our estimate is 26% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples