Intrinsic value of Lowe's Companies, Inc. - LOW

Previous Close

$101.88

  Intrinsic Value

$54.04

stock screener

  Rating & Target

sell

-47%

Previous close

$101.88

 
Intrinsic value

$54.04

 
Up/down potential

-47%

 
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 0001), $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 81.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  3.80
  3.92
  4.03
  4.13
  4.21
  4.29
  4.36
  4.43
  4.48
  4.54
  4.58
  4.62
  4.66
  4.69
  4.73
  4.75
  4.78
  4.80
  4.82
  4.84
  4.85
  4.87
  4.88
  4.89
  4.90
  4.91
  4.92
  4.93
  4.94
  4.94
Revenue, $m
  71,227
  74,019
  77,000
  80,176
  83,554
  87,140
  90,941
  94,966
  99,224
  103,724
  108,476
  113,491
  118,781
  124,358
  130,234
  136,424
  142,942
  149,803
  157,024
  164,620
  172,611
  181,015
  189,852
  199,142
  208,909
  219,174
  229,963
  241,301
  253,214
  265,732
Variable operating expenses, $m
  56,620
  58,835
  61,199
  63,718
  66,397
  69,241
  72,256
  75,448
  78,825
  82,393
  86,032
  90,009
  94,205
  98,628
  103,288
  108,197
  113,367
  118,808
  124,535
  130,560
  136,897
  143,562
  150,571
  157,939
  165,685
  173,826
  182,383
  191,375
  200,823
  210,751
Fixed operating expenses, $m
  7,845
  8,017
  8,194
  8,374
  8,558
  8,747
  8,939
  9,136
  9,337
  9,542
  9,752
  9,967
  10,186
  10,410
  10,639
  10,873
  11,112
  11,357
  11,607
  11,862
  12,123
  12,390
  12,662
  12,941
  13,225
  13,516
  13,814
  14,118
  14,428
  14,746
Total operating expenses, $m
  64,465
  66,852
  69,393
  72,092
  74,955
  77,988
  81,195
  84,584
  88,162
  91,935
  95,784
  99,976
  104,391
  109,038
  113,927
  119,070
  124,479
  130,165
  136,142
  142,422
  149,020
  155,952
  163,233
  170,880
  178,910
  187,342
  196,197
  205,493
  215,251
  225,497
Operating income, $m
  6,762
  7,167
  7,607
  8,084
  8,599
  9,152
  9,746
  10,383
  11,062
  11,788
  12,692
  13,515
  14,391
  15,320
  16,307
  17,354
  18,463
  19,638
  20,882
  22,199
  23,591
  25,063
  26,619
  28,263
  29,999
  31,832
  33,767
  35,809
  37,963
  40,236
EBITDA, $m
  8,442
  8,907
  9,413
  9,959
  10,547
  11,178
  11,855
  12,579
  13,351
  14,175
  15,052
  15,984
  16,974
  18,025
  19,140
  20,321
  21,572
  22,897
  24,298
  25,780
  27,346
  29,001
  30,749
  32,595
  34,543
  36,599
  38,769
  41,057
  43,471
  46,016
Interest expense (income), $m
  619
  918
  979
  1,044
  1,113
  1,187
  1,265
  1,348
  1,436
  1,529
  1,628
  1,732
  1,842
  1,958
  2,081
  2,210
  2,346
  2,490
  2,641
  2,800
  2,967
  3,143
  3,328
  3,523
  3,727
  3,943
  4,169
  4,407
  4,657
  4,919
  5,195
Earnings before tax, $m
  5,844
  6,187
  6,563
  6,971
  7,412
  7,887
  8,398
  8,947
  9,533
  10,160
  10,960
  11,673
  12,432
  13,239
  14,097
  15,008
  15,974
  16,998
  18,083
  19,232
  20,448
  21,735
  23,096
  24,535
  26,056
  27,663
  29,360
  31,152
  33,044
  35,040
Tax expense, $m
  1,578
  1,671
  1,772
  1,882
  2,001
  2,130
  2,268
  2,416
  2,574
  2,743
  2,959
  3,152
  3,357
  3,575
  3,806
  4,052
  4,313
  4,589
  4,882
  5,193
  5,521
  5,869
  6,236
  6,625
  7,035
  7,469
  7,927
  8,411
  8,922
  9,461
Net income, $m
  4,266
  4,517
  4,791
  5,089
  5,411
  5,758
  6,131
  6,531
  6,959
  7,417
  8,001
  8,521
  9,075
  9,665
  10,291
  10,956
  11,661
  12,408
  13,200
  14,039
  14,927
  15,867
  16,860
  17,911
  19,021
  20,194
  21,433
  22,741
  24,122
  25,579

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
  36,639
  38,075
  39,609
  41,243
  42,980
  44,825
  46,780
  48,851
  51,041
  53,356
  55,800
  58,380
  61,101
  63,970
  66,993
  70,177
  73,530
  77,059
  80,773
  84,681
  88,792
  93,115
  97,660
  102,440
  107,463
  112,744
  118,294
  124,126
  130,254
  136,693
Adjusted assets (=assets-cash), $m
  36,639
  38,075
  39,609
  41,243
  42,980
  44,825
  46,780
  48,851
  51,041
  53,356
  55,800
  58,380
  61,101
  63,970
  66,993
  70,177
  73,530
  77,059
  80,773
  84,681
  88,792
  93,115
  97,660
  102,440
  107,463
  112,744
  118,294
  124,126
  130,254
  136,693
Revenue / Adjusted assets
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
  1.944
Average production assets, $m
  21,226
  22,058
  22,946
  23,893
  24,899
  25,968
  27,100
  28,300
  29,569
  30,910
  32,326
  33,820
  35,397
  37,059
  38,810
  40,654
  42,597
  44,641
  46,793
  49,057
  51,438
  53,942
  56,576
  59,344
  62,255
  65,314
  68,529
  71,908
  75,458
  79,188
Working capital, $m
  1,496
  1,554
  1,617
  1,684
  1,755
  1,830
  1,910
  1,994
  2,084
  2,178
  2,278
  2,383
  2,494
  2,612
  2,735
  2,865
  3,002
  3,146
  3,297
  3,457
  3,625
  3,801
  3,987
  4,182
  4,387
  4,603
  4,829
  5,067
  5,318
  5,580
Total debt, $m
  18,134
  19,332
  20,611
  21,974
  23,423
  24,961
  26,592
  28,319
  30,145
  32,076
  34,114
  36,266
  38,536
  40,928
  43,449
  46,105
  48,901
  51,844
  54,942
  58,201
  61,629
  65,235
  69,026
  73,012
  77,202
  81,606
  86,234
  91,098
  96,209
  101,579
Total liabilities, $m
  30,557
  31,755
  33,034
  34,397
  35,846
  37,384
  39,015
  40,742
  42,568
  44,499
  46,537
  48,689
  50,959
  53,351
  55,872
  58,528
  61,324
  64,267
  67,365
  70,624
  74,052
  77,658
  81,449
  85,435
  89,625
  94,029
  98,657
  103,521
  108,632
  114,002
Total equity, $m
  6,082
  6,321
  6,575
  6,846
  7,135
  7,441
  7,766
  8,109
  8,473
  8,857
  9,263
  9,691
  10,143
  10,619
  11,121
  11,649
  12,206
  12,792
  13,408
  14,057
  14,739
  15,457
  16,212
  17,005
  17,839
  18,716
  19,637
  20,605
  21,622
  22,691
Total liabilities and equity, $m
  36,639
  38,076
  39,609
  41,243
  42,981
  44,825
  46,781
  48,851
  51,041
  53,356
  55,800
  58,380
  61,102
  63,970
  66,993
  70,177
  73,530
  77,059
  80,773
  84,681
  88,791
  93,115
  97,661
  102,440
  107,464
  112,745
  118,294
  124,126
  130,254
  136,693
Debt-to-equity ratio
  2.980
  3.060
  3.130
  3.210
  3.280
  3.350
  3.420
  3.490
  3.560
  3.620
  3.680
  3.740
  3.800
  3.850
  3.910
  3.960
  4.010
  4.050
  4.100
  4.140
  4.180
  4.220
  4.260
  4.290
  4.330
  4.360
  4.390
  4.420
  4.450
  4.480
Adjusted equity ratio
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  4,266
  4,517
  4,791
  5,089
  5,411
  5,758
  6,131
  6,531
  6,959
  7,417
  8,001
  8,521
  9,075
  9,665
  10,291
  10,956
  11,661
  12,408
  13,200
  14,039
  14,927
  15,867
  16,860
  17,911
  19,021
  20,194
  21,433
  22,741
  24,122
  25,579
Depreciation, amort., depletion, $m
  1,680
  1,741
  1,806
  1,875
  1,948
  2,026
  2,109
  2,196
  2,289
  2,387
  2,360
  2,469
  2,584
  2,705
  2,833
  2,967
  3,109
  3,258
  3,416
  3,581
  3,755
  3,937
  4,130
  4,332
  4,544
  4,767
  5,002
  5,249
  5,508
  5,780
Funds from operations, $m
  5,946
  6,258
  6,597
  6,964
  7,359
  7,784
  8,240
  8,727
  9,248
  9,804
  10,360
  10,990
  11,659
  12,370
  13,124
  13,923
  14,770
  15,667
  16,616
  17,620
  18,682
  19,804
  20,990
  22,243
  23,565
  24,961
  26,435
  27,990
  29,630
  31,360
Change in working capital, $m
  55
  59
  63
  67
  71
  75
  80
  85
  89
  94
  100
  105
  111
  117
  123
  130
  137
  144
  152
  160
  168
  176
  186
  195
  205
  216
  227
  238
  250
  263
Cash from operations, $m
  5,891
  6,199
  6,534
  6,897
  7,288
  7,709
  8,160
  8,643
  9,159
  9,709
  10,261
  10,885
  11,548
  12,253
  13,000
  13,793
  14,633
  15,523
  16,464
  17,461
  18,514
  19,628
  20,804
  22,047
  23,360
  24,746
  26,208
  27,752
  29,380
  31,097
Maintenance CAPEX, $m
  -1,491
  -1,549
  -1,610
  -1,675
  -1,744
  -1,817
  -1,895
  -1,978
  -2,066
  -2,158
  -2,256
  -2,360
  -2,469
  -2,584
  -2,705
  -2,833
  -2,967
  -3,109
  -3,258
  -3,416
  -3,581
  -3,755
  -3,937
  -4,130
  -4,332
  -4,544
  -4,767
  -5,002
  -5,249
  -5,508
New CAPEX, $m
  -793
  -832
  -888
  -947
  -1,007
  -1,069
  -1,133
  -1,199
  -1,269
  -1,341
  -1,416
  -1,495
  -1,576
  -1,662
  -1,751
  -1,845
  -1,942
  -2,045
  -2,152
  -2,264
  -2,381
  -2,504
  -2,633
  -2,769
  -2,910
  -3,059
  -3,215
  -3,379
  -3,550
  -3,730
Cash from investing activities, $m
  -2,284
  -2,381
  -2,498
  -2,622
  -2,751
  -2,886
  -3,028
  -3,177
  -3,335
  -3,499
  -3,672
  -3,855
  -4,045
  -4,246
  -4,456
  -4,678
  -4,909
  -5,154
  -5,410
  -5,680
  -5,962
  -6,259
  -6,570
  -6,899
  -7,242
  -7,603
  -7,982
  -8,381
  -8,799
  -9,238
Free cash flow, $m
  3,607
  3,818
  4,036
  4,275
  4,538
  4,823
  5,132
  5,465
  5,824
  6,210
  6,588
  7,031
  7,503
  8,007
  8,544
  9,116
  9,723
  10,369
  11,054
  11,781
  12,552
  13,369
  14,234
  15,149
  16,118
  17,143
  18,226
  19,371
  20,581
  21,859
Issuance/(repayment) of debt, $m
  1,139
  1,198
  1,279
  1,363
  1,449
  1,538
  1,631
  1,727
  1,827
  1,931
  2,039
  2,152
  2,269
  2,392
  2,521
  2,656
  2,796
  2,943
  3,098
  3,259
  3,428
  3,605
  3,791
  3,986
  4,190
  4,404
  4,629
  4,864
  5,111
  5,370
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  
  1,139
  1,198
  1,279
  1,363
  1,449
  1,538
  1,631
  1,727
  1,827
  1,931
  2,039
  2,152
  2,269
  2,392
  2,521
  2,656
  2,796
  2,943
  3,098
  3,259
  3,428
  3,605
  3,791
  3,986
  4,190
  4,404
  4,629
  4,864
  5,111
  5,370
Total cash flow (excl. dividends), $m
  4,746
  5,015
  5,315
  5,638
  5,987
  6,361
  6,762
  7,192
  7,651
  8,141
  8,627
  9,182
  9,773
  10,400
  11,065
  11,771
  12,520
  13,312
  14,152
  15,040
  15,980
  16,974
  18,025
  19,135
  20,308
  21,547
  22,854
  24,235
  25,692
  27,229
Retained Cash Flow (-), $m
  -209
  -238
  -255
  -271
  -288
  -306
  -325
  -344
  -364
  -384
  -406
  -428
  -452
  -476
  -502
  -529
  -557
  -586
  -617
  -649
  -682
  -718
  -755
  -793
  -834
  -877
  -921
  -968
  -1,017
  -1,069
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
  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 available for distribution, $m
  4,537
  4,777
  5,060
  5,367
  5,698
  6,055
  6,438
  6,848
  7,287
  7,756
  8,221
  8,754
  9,321
  9,923
  10,563
  11,243
  11,963
  12,726
  13,535
  14,392
  15,298
  16,257
  17,270
  18,342
  19,474
  20,670
  21,933
  23,267
  24,674
  26,160
Discount rate, %
  8.60
  9.03
  9.48
  9.96
  10.45
  10.98
  11.52
  12.10
  12.71
  13.34
  14.01
  14.71
  15.44
  16.22
  17.03
  17.88
  18.77
  19.71
  20.70
  21.73
  22.82
  23.96
  25.16
  26.42
  27.74
  29.12
  30.58
  32.11
  33.71
  35.40
PV of cash for distribution, $m
  4,177
  4,018
  3,856
  3,672
  3,466
  3,241
  3,000
  2,746
  2,483
  2,217
  1,944
  1,687
  1,441
  1,210
  999
  809
  642
  499
  380
  282
  204
  144
  99
  66
  43
  27
  16
  10
  5
  3
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 Companies, Inc. (LOW)

Valuation Ratios
P/E Ratio 28.5
Price to Sales 1.4
Price to Book 13.7
Price to Tangible Book
Price to Cash Flow 15.7
Price to Free Cash Flow 19.8
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 $68619 million for the last fiscal year's total revenue generated by Lowe's Companies, Inc.. The default revenue input number comes from 0001 income statement of Lowe's Companies, Inc.. 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 3.8% 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 8.6%, whose default value for LOW is calculated based on our internal credit rating of Lowe's Companies, Inc., 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 Companies, Inc..
    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 79.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $7676 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 Companies, Inc..

Corporate tax rate of 27% is the nominal tax rate for Lowe's Companies, Inc.. 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%.

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 29.8%.

Life of production assets of 13.7 years is the average useful life of capital assets used in Lowe's Companies, Inc. 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 2.1%. 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 - $5873 million for Lowe's Companies, Inc. - 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 802.976 million for Lowe's Companies, Inc. 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 Companies, Inc. at the current share price and the inputted number of shares is $81.8 billion.

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