Is Lowe's Companies, Inc. (LOW) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $232.10, Lowe's Companies, Inc. (LOW) sits inside a range too wide to call either way: our valuation lenses put the business somewhere between $90.93 and $395.80 per share. They disagree too widely for us to state a single fair value. We publish the range rather than a midpoint because a number that precise would claim more than the methods can support. This is an educational model, not a price target or a recommendation.
The valuation discounts Lowe's Companies, Inc.'s projected free cash flows at a weighted-average cost of capital (WACC) of 8.1%, with a long-run terminal growth rate of 2.5%. About 78% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — the market is implying roughly 1.2% annual revenue growth for LOW. Our base case instead compounds to about 4.2% a year over the same forecast, so the market is pricing in slower growth than our base case. The reverse-DCF is a quick sanity check: it reframes 'is this stock cheap?' as 'do I believe the growth the price requires?' rather than arguing over a single point estimate of fair value.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, LOW's modeled DCF value ranges from about $131.09 to $410.73 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what Lowe's Companies, Inc. would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of LOW's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind LOW's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $86,286,000,000 | Lowe's FY2025 10-K (accession 0000060667-26-000029, filed 2026-03-23), 52 weeks ended 2026-01-30: Net sales $86,286M, +3.1% on FY2024's $83,674M. Both years are 52 weeks, so no extra-week adjustment. THE GROWTH WAS BOUGHT, NOT EARNED: Retail Home Improvement (the stores) sold $84,078M, +0.5%, and the new 'Other' segment - Artisan Design Group (closed 2025-06-02, $1.3B) and Foundation Building Materials (closed 2025-10-09, $8.8B, consolidated on a one-month lag) - added $2,208M. Comparable sales +0.2% (ticket +3.0%, transactions -2.8%), after -2.7% (FY2024) and -4.7% (FY2023); sales were $97,059M in FY2022. The 10-K names 'housing turnover' among the key demand indicators it monitors. UNCHANGED as the base - the DCF grows it by forecast.revenue_growth. CROSS-CHECK: H1 FY2026 (six months to 2026-07-31) net sales $49,034M, +9.2% on $44,888M (8-K Ex-99.1, 2026-08-19), of which the Other segment was $3,695M vs $138M a year earlier (10-Q Note 13); comps +0.4%. Trailing twelve months to 2026-07-31: $90,432M. |
| Base EBIT margin | 11.8% | Lowe's Q4/FY2025 earnings release, 8-K Ex-99.1 (accession 0000060667-26-000020, filed 2026-02-25) + FY2025 10-K (accession 0000060667-26-000029) Note 18: GAAP operating income $10,153M / net sales $86,286M = 11.77% (us-gaap:OperatingIncomeLoss, ties to the 10-K). GAAP, i.e. AFTER $140M of acquired-intangible amortization and ~$181M of FBM/ADG transaction costs ($321M of acquisition costs in total, 10-K non-GAAP section) and a $125M Q4 discretionary frontline bonus. Ex the transaction costs alone it is ~11.98%. THE TREND (same tag, 10-K filings): 12.56% FY2021, 13.38% FY2023 peak, 12.51% FY2024, 11.77% FY2025 (FY2022 is distorted by charges on the sale of the Canadian retail business and is not used). The stores alone earned 12.16% in FY2025 (Retail Home Improvement segment, 10-K Note 18) - down from 13.38% two years earlier on deleverage and payroll (employee compensation 13.26% of segment sales vs 12.50% in FY2023). The new Other segment LOST $70M (-3.2%) in its first partial year, after amortization. CROSS-CHECK H1 FY2026: GAAP 12.45% ($6,103M) vs 13.29% in H1 FY2025 - 84bp down, of which ~31bp is the extra intangible amortization booked in D&A (10-Q MD&A) and most of the rest is gross margin (-74bp, 'including dilution from FBM and ADG'). Operating leases: the $768M of FY2025 operating lease cost stays inside this EBIT, consistent with leaving operating lease liabilities out of net debt. |
| Forecast revenue growth | 7% → 3% → 4% → 4% → 4% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation. Shared by every model in this tracker. For Lowe's it bites twice: it is the discount rate, and it is the base of the 30-year mortgage rate that holds housing turnover - and with it big-ticket DIY spending - near multi-decade lows. |
| Beta | 0.85 | Yahoo Finance 5Y-monthly beta via yfinance, read 2026-10-03: Published 5Y-monthly beta 0.846, used AS IS - no normalization, the same choice as Home Depot (0.955). The window covers the 2021-22 housing boom and the 2022-23 rate shock, which is genuine housing exposure. One known bias, stated rather than adjusted: most of the window predates the ~$7B of debt raised for FBM in September 2025, and a more levered company should carry a higher equity beta - so if anything 0.846 is low, which flatters the value. Each 0.1 of beta is worth roughly $18/share (0.946 gives ~$192). The price is justified at a beta of ~1.02. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (roughly long-run nominal GDP), kept for comparability with every other company in this tracker. FLAG: Lowe's own record is weaker than that - net sales were $72.1B in FY2019 and $86.3B in FY2025 (~3% a year, including a pandemic step-up and the FY2025 acquisitions), and the stores sold LESS in FY2025 ($84.1B) than in FY2021 ($96.3B). 3.0% adds ~$22/share; 2.0% takes ~$18 off. The price is justified at ~1.7%. Must remain < WACC of 8.14%. |
| Diluted shares | 560M | Lowe's Q2 2026 10-Q (accession 0000060667-26-000117) income statement + 8-K Ex-99.1 (2026-08-19): Q2 2026 (three months to 2026-07-31) weighted-average diluted shares 560M (basic 559M); H1 also 560M; FY2025 560M. Reported in whole millions only. Shares outstanding 561.05M at 2026-08-25. The count has stopped falling - it was 568M diluted in FY2024 - because buybacks were cut to $211M in FY2025 (from $4,053M) to fund FBM; $366M was repurchased in H1 FY2026 and $10.5B of authorization remains. Management told the 2026-09-15 conference buybacks resume once leverage reaches target (~mid-2027). SBC ($247M in FY2025) dilution is small. |
| Market price | $232.10 | Delayed quote · as of 2026-11-10 05:18 UTC |
Compare LOW with its peers
Companies people research alongside LOW
Explore more
Most undervalued stocks (per our valuation) · Undervalued Consumer stocks · All valued stocks · Interactive LOW valuation & downloadable modelTickerWorth is an educational DCF tool, not a licensed investment adviser. Figures are estimates derived from public filings and market data and can be wrong.