LOW
Lowe's Companies, Inc.
$215.68
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 4.7% below fair value
You pay
$215.68
Bear
$198.01
Fair
$226.29
Bull
$254.59
Bear
$198.01
-8.2%
$12.65 × 14x P/E
Fair
$226.29
+4.9%
$12.65 × 16x P/E
Bull
$254.59
+18.0%
$12.65 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
17.0x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $270.63 from 51 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $226.29 per share.
Warnings
Dividend-based valuation: $546.21 (above our primary estimate by 170%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $270.63 (from 51 analysts). Our estimate is 25% 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