Lowe's Companies Inc. (LOW) DCF Valuation
Lowe's DCF: $6.5B TTM FCF, $31B net debt, 4% growth on Pro + supply-chain.
Consumer Discretionary · Founded 1946 · Beta 1.05
Lowe's Companies Inc.
Current price: $248.30 · Market cap ≈ $139.0B
Lowe's $6.5B TTM FCF trails Home Depot in absolute terms but the dividend is reliable. The $31B net debt is moderate. Long-term thesis depends on Pro segment expansion + supply-chain efficiency.
DCF Valuation Inputs
High-growth phase
Decay/growth normalization
Perpetual (≤ WACC)
Must be > terminal growth
in millions
Enterprise Value
$111M
Equity Value
$80M
Per Share
$0
Upside / (Downside)
-100.0%
PV of explicit FCF
$29M
Terminal value
$124M
PV of terminal
$83M
Terminal % of EV
74.2%
| Year | Growth | FCF ($M) | Discount Factor | PV ($M) |
|---|---|---|---|---|
| 0 | base | $7 | 1.000 | — |
| 1 | 4.0% | $7 | 0.922 | $6 |
| 2 | 4.0% | $7 | 0.849 | $6 |
| 3 | 4.0% | $7 | 0.783 | $6 |
| 4 | 4.0% | $8 | 0.722 | $5 |
| 5 | 4.0% | $8 | 0.665 | $5 |
| Terminal | perpetual | — | — | $83 |
Discount factor = 1 / (1 + WACC)ⁿ. Terminal value computed using the Gordon Growth Model: TV = FCF_N × (1 + g) / (WACC − g), then discounted back to present.
| g ＼ WACC | 6.5% | 7.5% | 8.5% | 9.5% | 10.5% |
|---|---|---|---|---|---|
| 1.0% | $0 | $0 | $0 | $0 | $0 |
| 1.5% | $0 | $0 | $0 | $0 | $0 |
| 2.0% | $0 | $0 | $0 | $0 | $0 |
| 2.5% | $0 | $0 | $0 | $0 | $0 |
| 3.0% | $0 | $0 | $0 | $0 | $0 |
Highlighted cell is your current WACC × terminal-growth assumption. Cells beyond WACC ≤ g are undefined (Gordon Growth fails).
LOW DCF: At Default Assumptions
| Item | Value | Notes |
|---|---|---|
| Current price | $248.30 | Market |
| Intrinsic value (per share) | $0.14 | DCF model output |
| Upside / (Downside) | -99.9% | vs current price |
| Enterprise value | $$111M | PV of explicit FCF + terminal |
| Equity value | $$80M | EV − net debt |
| Key fact | Lowe's Pro: $10B+ annual revenue | |
Numbers reflect TTM fundamentals + default DCF assumptions (8.5% WACC, 2.0% terminal growth, 4% Year-1 growth, 4% Years 2+). Use the calculator above to run your own scenario.
LOW Sources & References
- SEC EDGAR: latest 10-K filing, 10-Q filings, and proxy statement for Lowe's Companies Inc. (LOW).
- Yahoo Finance: real-time price snapshot, analyst consensus growth estimates, and 52-week range.
- S&P Capital IQ: WACC build (cost of equity via CAPM + after-tax cost of debt).
- Federal Reserve Economic Data (FRED): risk-free rate for CAPM, sector beta benchmarks.
- Damodaran Online (NYU): Consumer Discretionary sector WACC and beta benchmarks for cross-validation.
DCF models for other large-caps
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Author
Maya Chen, CFA
Chartered Financial Analyst
Independently reviewed
Dr. Aaron Pak, PhD
Doctor of Kinesiology & Public Health
Last reviewed: August 12, 2026 · Next scheduled review: quarterly
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Cross-checked against authoritative formulas (IRS, NIST, ACM) and updated for 2025/2026 tax years and rates.
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