Lowe's Companies Inc

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LOW : NYSE : Services
$76.065 -0.035 | -0.046%
Today's Range: 75.69 - 76.44
Avg. Daily Volume: 5398800.0
02/27/17 - 2:57 PM ET

Financial Analysis


LOWE'S COMPANIES INC's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. LOWE'S COMPANIES INC has very weak liquidity. Currently, the Quick Ratio is 0.09 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has decreased by 21.23% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)15739.014360.0
EBITDA ($mil)1749.01703.0
EBIT ($mil)1371.01329.0
Net Income ($mil)378.0736.0


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)1083.01385.0
Total Assets ($mil)35370.033655.0
Total Debt ($mil)15195.012599.0
Equity ($mil)6599.08378.0


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin34.3534.75
EBITDA Margin11.1111.85
Operating Margin8.719.25
Sales Turnover1.771.73
Return on Assets6.898.86
Return on Equity36.9635.62
Debt Q3 FY16 Q3 FY15
Current Ratio1.011.02
Debt/Capital0.70.6
Interest Expense168.0144.0
Interest Coverage8.169.23


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)873.0917.0
Div / share0.350.28
EPS0.430.8
Book value / share7.569.14
Institutional Own % n/a n/a
Avg Daily Volume5314987.06262668.0

Valuation


BUY. The current P/E ratio indicates a premium compared to an average of 22.53 for the Specialty Retail industry and a value on par with the S&P 500 average of 26.53. To use another comparison, its price-to-book ratio of 10.03 indicates a significant premium versus the S&P 500 average of 2.96 and a significant discount versus the industry average of 18.37. The current price-to-sales ratio is well below the S&P 500 average and is also below the industry average, indicating a discount.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
LOW 27.77 Peers 22.53   LOW 11.96 Peers 14.67

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

LOW is trading at a premium to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

LOW is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
LOW 16.73 Peers 19.53   LOW 0.64 Peers 1.86

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

LOW is trading at a valuation on par with its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

LOW trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
LOW 10.03 Peers 18.37   LOW -13.61 Peers 5.04

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

LOW is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, LOW is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
LOW 1.06 Peers 1.51   LOW 7.00 Peers 7.39

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

LOW is trading at a significant discount to its industry on this measurement.

 

Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share.

LOW is keeping pace with its peers on the basis of sales growth.

 

 

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