Intrinsic value of Lowe's - LOW

Previous Close

$98.40

  Intrinsic Value

$67.26

stock screener

  Rating & Target

sell

-32%

Previous close

$98.40

 
Intrinsic value

$67.26

 
Up/down potential

-32%

 
Rating

sell

We calculate the intrinsic value of LOW stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 85.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  10.10
  9.59
  9.13
  8.72
  8.35
  8.01
  7.71
  7.44
  7.20
  6.98
  6.78
  6.60
  6.44
  6.30
  6.17
  6.05
  5.95
  5.85
  5.77
  5.69
  5.62
  5.56
  5.50
  5.45
  5.41
  5.37
  5.33
  5.30
  5.27
  5.24
Revenue, $m
  71,584
  78,449
  85,612
  93,075
  100,843
  108,923
  117,321
  126,049
  135,118
  144,544
  154,342
  164,529
  175,125
  186,152
  197,631
  209,588
  222,048
  235,039
  248,590
  262,732
  277,498
  292,921
  309,038
  325,887
  343,507
  361,940
  381,230
  401,422
  422,565
  444,708
Variable operating expenses, $m
  61,050
  66,894
  72,993
  79,347
  85,960
  92,838
  99,988
  107,418
  115,139
  123,164
  131,397
  140,069
  149,090
  158,478
  168,250
  178,430
  189,037
  200,097
  211,634
  223,673
  236,244
  249,374
  263,095
  277,439
  292,440
  308,133
  324,555
  341,745
  359,744
  378,596
Fixed operating expenses, $m
  3,891
  3,976
  4,064
  4,153
  4,245
  4,338
  4,433
  4,531
  4,631
  4,733
  4,837
  4,943
  5,052
  5,163
  5,277
  5,393
  5,511
  5,632
  5,756
  5,883
  6,012
  6,145
  6,280
  6,418
  6,559
  6,704
  6,851
  7,002
  7,156
  7,313
Total operating expenses, $m
  64,941
  70,870
  77,057
  83,500
  90,205
  97,176
  104,421
  111,949
  119,770
  127,897
  136,234
  145,012
  154,142
  163,641
  173,527
  183,823
  194,548
  205,729
  217,390
  229,556
  242,256
  255,519
  269,375
  283,857
  298,999
  314,837
  331,406
  348,747
  366,900
  385,909
Operating income, $m
  6,643
  7,578
  8,555
  9,576
  10,639
  11,747
  12,900
  14,100
  15,348
  16,648
  18,108
  19,517
  20,983
  22,511
  24,104
  25,766
  27,499
  29,309
  31,200
  33,176
  35,242
  37,402
  39,663
  42,030
  44,508
  47,104
  49,824
  52,675
  55,664
  58,799
EBITDA, $m
  8,992
  10,142
  11,343
  12,597
  13,904
  15,264
  16,680
  18,153
  19,686
  21,280
  22,939
  24,666
  26,464
  28,338
  30,290
  32,326
  34,449
  36,666
  38,981
  41,399
  43,927
  46,571
  49,336
  52,230
  55,260
  58,433
  61,757
  65,240
  68,891
  72,718
Interest expense (income), $m
  619
  848
  1,000
  1,159
  1,326
  1,499
  1,680
  1,867
  2,062
  2,265
  2,476
  2,695
  2,922
  3,159
  3,405
  3,661
  3,928
  4,206
  4,495
  4,797
  5,112
  5,440
  5,783
  6,141
  6,516
  6,907
  7,316
  7,745
  8,193
  8,662
  9,153
Earnings before tax, $m
  5,795
  6,578
  7,396
  8,250
  9,140
  10,067
  11,033
  12,037
  13,083
  14,172
  15,414
  16,594
  17,824
  19,106
  20,443
  21,838
  23,294
  24,814
  26,403
  28,064
  29,801
  31,619
  33,522
  35,514
  37,601
  39,788
  42,080
  44,483
  47,003
  49,646
Tax expense, $m
  1,565
  1,776
  1,997
  2,227
  2,468
  2,718
  2,979
  3,250
  3,533
  3,826
  4,162
  4,480
  4,813
  5,159
  5,520
  5,896
  6,289
  6,700
  7,129
  7,577
  8,046
  8,537
  9,051
  9,589
  10,152
  10,743
  11,362
  12,010
  12,691
  13,404
Net income, $m
  4,231
  4,802
  5,399
  6,022
  6,672
  7,349
  8,054
  8,787
  9,551
  10,346
  11,252
  12,114
  13,012
  13,947
  14,923
  15,942
  17,004
  18,115
  19,274
  20,487
  21,755
  23,082
  24,471
  25,925
  27,449
  29,045
  30,718
  32,472
  34,312
  36,242

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  37,875
  41,507
  45,297
  49,246
  53,356
  57,631
  62,075
  66,692
  71,491
  76,478
  81,662
  87,052
  92,659
  98,493
  104,567
  110,893
  117,486
  124,359
  131,529
  139,012
  146,824
  154,985
  163,512
  172,427
  181,750
  191,503
  201,709
  212,393
  223,579
  235,295
Adjusted assets (=assets-cash), $m
  37,875
  41,507
  45,297
  49,246
  53,356
  57,631
  62,075
  66,692
  71,491
  76,478
  81,662
  87,052
  92,659
  98,493
  104,567
  110,893
  117,486
  124,359
  131,529
  139,012
  146,824
  154,985
  163,512
  172,427
  181,750
  191,503
  201,709
  212,393
  223,579
  235,295
Revenue / Adjusted assets
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
  1.890
Average production assets, $m
  22,406
  24,554
  26,796
  29,133
  31,564
  34,093
  36,721
  39,453
  42,292
  45,242
  48,309
  51,498
  54,814
  58,265
  61,859
  65,601
  69,501
  73,567
  77,809
  82,235
  86,857
  91,684
  96,729
  102,003
  107,518
  113,287
  119,325
  125,645
  132,263
  139,194
Working capital, $m
  4,223
  4,628
  5,051
  5,491
  5,950
  6,426
  6,922
  7,437
  7,972
  8,528
  9,106
  9,707
  10,332
  10,983
  11,660
  12,366
  13,101
  13,867
  14,667
  15,501
  16,372
  17,282
  18,233
  19,227
  20,267
  21,354
  22,493
  23,684
  24,931
  26,238
Total debt, $m
  18,517
  21,470
  24,552
  27,762
  31,104
  34,579
  38,192
  41,946
  45,847
  49,902
  54,116
  58,499
  63,057
  67,800
  72,738
  77,881
  83,241
  88,829
  94,658
  100,742
  107,093
  113,728
  120,661
  127,908
  135,488
  143,417
  151,714
  160,400
  169,495
  179,020
Total liabilities, $m
  30,792
  33,745
  36,827
  40,037
  43,379
  46,854
  50,467
  54,221
  58,122
  62,177
  66,391
  70,774
  75,332
  80,075
  85,013
  90,156
  95,516
  101,104
  106,933
  113,017
  119,368
  126,003
  132,936
  140,183
  147,763
  155,692
  163,989
  172,675
  181,770
  191,295
Total equity, $m
  7,083
  7,762
  8,471
  9,209
  9,978
  10,777
  11,608
  12,471
  13,369
  14,301
  15,271
  16,279
  17,327
  18,418
  19,554
  20,737
  21,970
  23,255
  24,596
  25,995
  27,456
  28,982
  30,577
  32,244
  33,987
  35,811
  37,720
  39,717
  41,809
  44,000
Total liabilities and equity, $m
  37,875
  41,507
  45,298
  49,246
  53,357
  57,631
  62,075
  66,692
  71,491
  76,478
  81,662
  87,053
  92,659
  98,493
  104,567
  110,893
  117,486
  124,359
  131,529
  139,012
  146,824
  154,985
  163,513
  172,427
  181,750
  191,503
  201,709
  212,392
  223,579
  235,295
Debt-to-equity ratio
  2.610
  2.770
  2.900
  3.010
  3.120
  3.210
  3.290
  3.360
  3.430
  3.490
  3.540
  3.590
  3.640
  3.680
  3.720
  3.760
  3.790
  3.820
  3.850
  3.880
  3.900
  3.920
  3.950
  3.970
  3.990
  4.000
  4.020
  4.040
  4.050
  4.070
Adjusted equity ratio
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  4,231
  4,802
  5,399
  6,022
  6,672
  7,349
  8,054
  8,787
  9,551
  10,346
  11,252
  12,114
  13,012
  13,947
  14,923
  15,942
  17,004
  18,115
  19,274
  20,487
  21,755
  23,082
  24,471
  25,925
  27,449
  29,045
  30,718
  32,472
  34,312
  36,242
Depreciation, amort., depletion, $m
  2,349
  2,564
  2,788
  3,021
  3,265
  3,517
  3,780
  4,054
  4,337
  4,632
  4,831
  5,150
  5,481
  5,827
  6,186
  6,560
  6,950
  7,357
  7,781
  8,224
  8,686
  9,168
  9,673
  10,200
  10,752
  11,329
  11,932
  12,565
  13,226
  13,919
Funds from operations, $m
  6,579
  7,366
  8,187
  9,044
  9,937
  10,866
  11,834
  12,841
  13,888
  14,978
  16,083
  17,264
  18,493
  19,774
  21,109
  22,502
  23,955
  25,471
  27,055
  28,710
  30,441
  32,250
  34,144
  36,126
  38,200
  40,374
  42,651
  45,037
  47,538
  50,161
Change in working capital, $m
  387
  405
  423
  440
  458
  477
  496
  515
  535
  556
  578
  601
  625
  651
  677
  705
  735
  766
  800
  834
  871
  910
  951
  994
  1,040
  1,088
  1,138
  1,191
  1,247
  1,306
Cash from operations, $m
  6,192
  6,961
  7,764
  8,603
  9,478
  10,390
  11,339
  12,326
  13,353
  14,422
  15,505
  16,662
  17,868
  19,123
  20,432
  21,796
  23,219
  24,705
  26,256
  27,876
  29,570
  31,340
  33,193
  35,131
  37,161
  39,286
  41,513
  43,846
  46,291
  48,855
Maintenance CAPEX, $m
  -2,038
  -2,241
  -2,455
  -2,680
  -2,913
  -3,156
  -3,409
  -3,672
  -3,945
  -4,229
  -4,524
  -4,831
  -5,150
  -5,481
  -5,827
  -6,186
  -6,560
  -6,950
  -7,357
  -7,781
  -8,224
  -8,686
  -9,168
  -9,673
  -10,200
  -10,752
  -11,329
  -11,932
  -12,565
  -13,226
New CAPEX, $m
  -2,025
  -2,149
  -2,242
  -2,336
  -2,431
  -2,529
  -2,629
  -2,732
  -2,839
  -2,950
  -3,067
  -3,189
  -3,317
  -3,451
  -3,593
  -3,742
  -3,900
  -4,066
  -4,242
  -4,426
  -4,622
  -4,828
  -5,045
  -5,274
  -5,515
  -5,770
  -6,038
  -6,320
  -6,618
  -6,931
Cash from investing activities, $m
  -4,063
  -4,390
  -4,697
  -5,016
  -5,344
  -5,685
  -6,038
  -6,404
  -6,784
  -7,179
  -7,591
  -8,020
  -8,467
  -8,932
  -9,420
  -9,928
  -10,460
  -11,016
  -11,599
  -12,207
  -12,846
  -13,514
  -14,213
  -14,947
  -15,715
  -16,522
  -17,367
  -18,252
  -19,183
  -20,157
Free cash flow, $m
  2,129
  2,571
  3,067
  3,588
  4,134
  4,705
  5,301
  5,922
  6,569
  7,242
  7,914
  8,643
  9,401
  10,191
  11,012
  11,868
  12,759
  13,688
  14,658
  15,669
  16,724
  17,827
  18,980
  20,185
  21,446
  22,765
  24,146
  25,593
  27,109
  28,697
Issuance/(repayment) of debt, $m
  2,818
  2,953
  3,081
  3,211
  3,342
  3,475
  3,613
  3,754
  3,901
  4,055
  4,215
  4,382
  4,558
  4,743
  4,938
  5,143
  5,360
  5,588
  5,829
  6,083
  6,352
  6,635
  6,933
  7,248
  7,579
  7,929
  8,298
  8,686
  9,095
  9,525
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  2,818
  2,953
  3,081
  3,211
  3,342
  3,475
  3,613
  3,754
  3,901
  4,055
  4,215
  4,382
  4,558
  4,743
  4,938
  5,143
  5,360
  5,588
  5,829
  6,083
  6,352
  6,635
  6,933
  7,248
  7,579
  7,929
  8,298
  8,686
  9,095
  9,525
Total cash flow (excl. dividends), $m
  4,947
  5,524
  6,148
  6,798
  7,475
  8,180
  8,913
  9,676
  10,470
  11,297
  12,129
  13,025
  13,960
  14,934
  15,950
  17,011
  18,119
  19,277
  20,487
  21,752
  23,076
  24,462
  25,913
  27,433
  29,025
  30,694
  32,444
  34,279
  36,203
  38,223
Retained Cash Flow (-), $m
  -649
  -679
  -709
  -738
  -769
  -799
  -831
  -864
  -897
  -933
  -969
  -1,008
  -1,048
  -1,091
  -1,136
  -1,183
  -1,233
  -1,285
  -1,341
  -1,399
  -1,461
  -1,526
  -1,595
  -1,667
  -1,743
  -1,824
  -1,909
  -1,998
  -2,092
  -2,191
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  65
  72
  78
  86
  93
  101
  109
  117
  126
  135
  145
  154
  165
  175
  186
  198
  210
  222
  235
  249
  263
  277
  293
  309
  326
  344
  362
  381
  401
  423
Cash available for distribution, $m
  4,299
  4,845
  5,439
  6,060
  6,707
  7,381
  8,082
  8,813
  9,573
  10,364
  11,159
  12,017
  12,911
  13,843
  14,815
  15,828
  16,886
  17,991
  19,146
  20,353
  21,615
  22,936
  24,318
  25,765
  27,282
  28,870
  30,535
  32,281
  34,112
  36,032
Discount rate, %
  7.70
  8.09
  8.49
  8.91
  9.36
  9.83
  10.32
  10.83
  11.38
  11.95
  12.54
  13.17
  13.83
  14.52
  15.25
  16.01
  16.81
  17.65
  18.53
  19.46
  20.43
  21.45
  22.52
  23.65
  24.83
  26.07
  27.38
  28.75
  30.18
  31.69
PV of cash for distribution, $m
  3,991
  4,147
  4,260
  4,306
  4,288
  4,206
  4,064
  3,870
  3,630
  3,353
  3,042
  2,723
  2,397
  2,075
  1,763
  1,471
  1,204
  965
  757
  581
  436
  319
  227
  158
  107
  70
  44
  27
  16
  9
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Lowe's Companies, Inc. (Lowe's) is a home improvement company. The Company operates approximately 2,370 home improvement and hardware stores. The Company offers a range of products for maintenance, repair, remodeling and decorating. The Company offers home improvement products in categories, including Lumber and Building Materials; Tools and Hardware; Appliances; Fashion Fixtures; Rough Plumbing and Electrical; Lawn and Garden; Seasonal and Outdoor Living; Paint; Flooring; Millwork, and Kitchens. The Company also supports the communities that focus on K-12 public education and community improvement projects. The Company serves its customers in the United States, Canada and Mexico.

FINANCIAL RATIOS  of  Lowe's (LOW)

Valuation Ratios
P/E Ratio 27.6
Price to Sales 1.3
Price to Book 13.2
Price to Tangible Book
Price to Cash Flow 15.2
Price to Free Cash Flow 19.1
Growth Rates
Sales Growth Rate 10.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -2.5%
Cap. Spend. - 3 Yr. Gr. Rate 4.4%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 223.7%
Total Debt to Equity 244%
Interest Coverage 9
Management Effectiveness
Return On Assets 10.5%
Ret/ On Assets - 3 Yr. Avg. 9.7%
Return On Total Capital 14.6%
Ret/ On T. Cap. - 3 Yr. Avg. 13.1%
Return On Equity 43.9%
Return On Equity - 3 Yr. Avg. 32.5%
Asset Turnover 2
Profitability Ratios
Gross Margin 34.6%
Gross Margin - 3 Yr. Avg. 34.7%
EBITDA Margin 11.4%
EBITDA Margin - 3 Yr. Avg. 11.3%
Operating Margin 9%
Oper. Margin - 3 Yr. Avg. 8.4%
Pre-Tax Margin 8%
Pre-Tax Margin - 3 Yr. Avg. 7.7%
Net Profit Margin 4.8%
Net Profit Margin - 3 Yr. Avg. 4.6%
Effective Tax Rate 40.5%
Eff/ Tax Rate - 3 Yr. Avg. 39.9%
Payout Ratio 36.2%

LOW stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LOW stock intrinsic value calculation we used $65017 million for the last fiscal year's total revenue generated by Lowe's. The default revenue input number comes from 2017 income statement of Lowe's. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our LOW stock valuation model: a) initial revenue growth rate of 10.1% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 7.7%, whose default value for LOW is calculated based on our internal credit rating of Lowe's, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Lowe's.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of LOW stock the variable cost ratio is equal to 85.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $3807 million in the base year in the intrinsic value calculation for LOW stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Lowe's.

Corporate tax rate of 27% is the nominal tax rate for Lowe's. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the LOW stock is equal to 0.1%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for LOW are equal to 31.3%.

Life of production assets of 10 years is the average useful life of capital assets used in Lowe's operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for LOW is equal to 5.9%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $6434 million for Lowe's - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 870 million for Lowe's is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Lowe's at the current share price and the inputted number of shares is $85.6 billion.

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BMCH BMC Stock Hold 21.80 12.96  sell

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▶ Lowe's Boosted by Axing Executives   [10:44AM  Barrons.com]
▶ [$$] Lowe's Eliminates Some Leadership Roles   [05:01PM  The Wall Street Journal]
▶ [$$] Lowes cuts COO job in management overhaul   [05:03AM  Financial Times]
▶ Yahoo Finance Live: Midday Movers - Jun 26th, 2018   [Jun-26-18 09:40AM  Yahoo Finance Video]
▶ Is Lowes Stock a Good Deal at Current Prices?   [Jun-21-18 03:35PM  InvestorPlace]
▶ Accenture exec talks necessity of workplace equality and how to make it happen   [Jun-18-18 06:46AM  American City Business Journals]
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▶ CEO Turnover Jumps 15% Amid Economic Uncertainty   [Jun-06-18 11:34AM  TheStreet.com]
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▶ Lowe's Announces CFO Retirement   [08:30AM  PR Newswire]
▶ Will New Leadership Make a Difference for Lowe's Stock?   [Jun-03-18 09:42AM  Motley Fool]
▶ A Deep Dive Into Lowes Business   [12:00AM  Motley Fool]
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▶ Lowes to Yank These Deadly Paint Strippers After Protest   [May-30-18 03:06PM  InvestorPlace]
▶ How Big of a Deal Is Lowe's New CEO?   [01:27PM  Motley Fool]
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