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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Lowe'S Companies, Inc. (XNYS:LOW) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
LOW
Name:
LOWE'S COMPANIES, INC. (XNYS:LOW)
Sector:
2.63B
Industry:
Home Improvement Retail
CEO:
Mr. Marvin Ellison
Total Employees:
200,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -103.23% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF LOWE'S COMPANIES, INC.(LOW) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND HOME IMPROVEMENT RETAIL INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
195.51
One Month Price Target:
$196.83
Six Month Price Target :
$203.45
Likely Price in One Year's Time:
Ticker:
$211.39
Likely Trading Range Today Under (Normal Volatility)
$194.93
Price Upper limit ($) :
$196.5
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$186.21
This week:
$174.71
This month :
$153.91
Other Primary facts
Market Cap:
119.77B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
620.70M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
14.01%
-24.77%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$238.63
$218.57
$152.39
$172.45
Medium risk (<10%) entry points
Buy Call
Sell Call
$212.05
Buy Put:
Sell Put:
$207.76
$178.92
$183.26
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
LOW
Sharpe Ratio:
3.97%
Comparison:
LOW, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 20.96% higher than the industry
& ratio is 74.28% higher than the market/S&P 500 average
Average Returns/Yield of
LOW
Daily returns:
0.10%
Weekly returns:
0.51%
Monthly returns:
2.06%
Yearly returns:
28.57%
Comparison of returns:
Average annual returns/yield (last 3 years) is -13.59% below industry average
Classification:
LOW, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.8
Statistical test of Returns:
LOW has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.37%
Weekly Volatility:
5.29%
Monthly Volatility:
10.58%
Yearly Volatility:
36.66%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.28%
Volatility in last five trading days has been -46.00% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.76%
Weekly VaR:
-10.64%
Monthly VaR:
-21.28%
How Much Can the price of
LOW
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-73.70%
This translates to price declining to:
$161.04
This translates to price declining to:
$51.41
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
LOW is a 50.17% riskier investment compared to the market/S&P 500 & is 28.65% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -32.07% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
LOW
Beta in relation to market/S&P 500--1.21
Expected beta in 1 year's time:
0.831
Expected beta in 3 year's time:
1.175
Unlevered (debt free) Beta:
-0.466
Beta in relation to Nasdaq (XNAS):
0.872
Beta in relation to all global stocks::
0.866
Beta Comparison & Analysis
Beta of competitors/peers::
0.961
Beta is 25.78% higher than peers
Average Industry Beta:
1.77
Beta is -31.71% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
18757.25%
Sustainable growth rate is 289.95% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.133
Alpha is -0.29% below industry average alpha yield
Alpha is 844% higher than market/& is unsustainably high
Analysis of Cost of Capital of
LOW
Equity cost of capital:
0.114
Equity cost of capital is -25.17% below industry mean WACC
Unlevered (without debt) cost of capital:
-4.41%
Before-tax cost of debt:
1.29%
After-tax cost of debt:
1.02%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.02%
WACC is -57.65% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$153.84
Revenue growth rate per share of (3Y):
-17.65
Annual revenue growth rate is -67.35% below industry average
EPS:
$12.27
Expected Annual growth rate of EPS (3Y):
61.80%
Expected future EPS growth rate is -56.34% lower than the Home Improvement Retail industry
Free cash flow (FCF) per share:
$10.24
Balance sheet equity growth per share: 48.39%
Equity growth rate per share is 107.91% higher than the industry
Debt per share
$52.90
EBITDA per share
$21.93
Valuation Analysis Today of
LOW
P/E Ratio:
15.42
P/E Ratio of Competitors/Peers:
19.98
P/E ratio is -22.85% lower than main peers & is -39.48% lower than the industry
Stock price/value with industry average P/E ratio: $312.52
LOW is -37.44% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $66.39
Present value of the expected future dividends only: $46.39
P/S (Price to Sales ratio):
1.27
Price to sales ratio is -42.25% below the industry mean
P/B (Price to book value ratio):
-17.65
Price to free cash flow: 19.09
FALSE
Net income growth rate (3Y):
89.87%
Net income growth rate is -34.18% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 6.35%
Dividend yeild: 1.64%
Previous Dividend: $0.80
Previous adjusted dividend: $0.80
Previous Dividend: $3.20
Expected next dividend best case: $0.90
Expected next dividend worst case: $0.70
Average dividend payment (long-term): $0.65
Average dividend increase/decrease (growth rate) % per period: 4.24%
Expected next dividend payment date: 08/02/2022
Expected next dividend record date: 19/07/2022
Expected next dividend declaration date: 16/06/2022
Previous dividend payment date: 05/04/2022
Previous dividend record date: 20/04/2022
Previous dividend declaration date: 18/03/2022
Dividend History:
2022-04-19--$0.80
2021-10-19--$0.80
2021-04-20--$0.60
2022-01-18--$0.80
2021-07-20--$0.80
2021-01-19--$0.60
Dividend growth rate is 8.23% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
-477.49%
Net debt to equity ratio:
-438.90%
Debt to assets ratio:
66.04%
Net debt to assets ratio:
60.70%
Debt-to-asset ratio is -24.28% below industry average
Ability to repay debt:
Interest coverage ratio:
31.36
Interest coverage ratio is -85.34% less than industry average
Looking forward:
Debt growth rate:
0.00%
-
Debt repayment rate in last quarter: 2.30%
Analysis of Key Statistics
Correlation of price movement with the market:
0.728
Statistical significance of correlation:
LOW has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.656
Stock price is 10.98% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.656
Correlation of price movement with Nasdaq (^IXIC):
-0.007
Covariance of price movement with the market:
-0.01
Kurtosis
21.952
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-1.726
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
LOW
Gross Profit Margin Ratio:
134%
Operating Profit Margin Ratio:
12.72%
Operating profit margin is 46.77% higher than the industry
Net Profit Margin Ratio:
134%
Effective Tax Rate:
24.74%
Effective tax rate is 7.80% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-122.93%
Return on equity (ROE) is -102.38% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
17.00%
Return on assets (ROA) is 25.28% higher than the industry
Financial Leverage:
2.9x
Current Ratio:
1.17
Current ratio is -31.42% below industry average
Cash Conversion Cycle (days):
-51.3
Cash conversion cycle is -170.90% below industry average
The remaining useful life of property plant & equipment is: 8.6 years
Stock based compensation to net income ratio:
0.59%
In-depth Efficiency Analysis
Revenue generated per employee:
477.4K
Each employee generates 0% more revenue than industry average revenue per employee
EBITDA generated per employee:
68.0K
Each employee generates 33% more EBITDA than industry average revenue per employee
Profit generated per employee:
42.3K
Each employee generates 64% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
13.2K
Each employee generates 3701% more free cash flow than industry average revenue per employee
Assets/Capital per employee
120.6K
Each employee generates 3701% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
LOW
MCDONALD'S CORPORATION (XNYS:MCD)
FORD MOTOR COMPANY (XNYS:F)
GENERAL MOTORS COMPANY (XNYS:GM)
THE TJX COMPANIES, INC. (XNYS:TJX)
Stellantis NV (XNYS:STLA)
Ferrari NV (XNYS:RACE)
TOYOTA MOTOR CORPORATION (XNYS:TM)
COMCAST HOLDINGS CORPORATION (XNYS:CCZ)
THE WALT DISNEY COMPANY (XNYS:DIS)
Current Analyst Ratings
Strong buy�33%
Buy�42%
Hold�54%
Sell�0%
Strong sell�4%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
4/29/22
Revenue:
95.49B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
63.51B
31.98B
-
-
18.11B
-
1.72B
19.83B
9.00M
434.00M
1.94B
13.61B
12.15B
8.45B
11.23B
2.78B
8.45B
Statement of Cash Flow
Date:
Period:
503.00M
Differed Income Tax :
59.00M
Stock Based Compensation :
50.00M
Change in Working Capital :
- 107000.00K
Accounts Receivables:
-
Other Working Capital:
191.00M
Other Non-Cash Items:
139.00M
Net Cash Provided by Operating Activities:
2.98B
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 109000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
4/29/22
2022
Q1
3.41B
368.00M
3.78B
-
20.24B
1.59B
25.61B
23.02B
-
-
76.00M
33.00M
984.00M
24.11B
-
49.73B
13.83B
760.00M
-
2.09B
5.15B
21.83B
32.84B
797.00M
34.77B
-
56.60B
326.00M
- 7367000.00K
164.0M
-
April 29, 2022 at 6:00:00 AM
83.34B
- 6877000.00K
49.73B
444.00M
33.60B
30.2B
132.00M
- 333000.00K
- 310000.00K
- 773000.00K
-
- 4037000.00K
- 537000.00K
4.96B
- 386000.00K
-
2.28B
3.41B
1.13B
2.98B
- 343000.00K
2.63B
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
LOW
2023
2024
2025
2026
2027
$212.45
$332.81
$359.85
$389.08
$420.69