Report
Valens Research

LOW - Embedded Expectations Analysis - 2021 07 06

Lowe's Companies, Inc. (LOW:USA) currently trades around corporate averages relative to UAFRS-based (Uniform) earnings, with a 22.8x Uniform P/E. At these levels, the market has expectations for profitability to remain stable, but management may be concerned about inflationary headwinds, margin targets, and the home improvement industry outlook

Specifically, management may have concerns about inflationary headwinds, potential spending shifts away from home, and the sustainability of tailwinds for the home
improvement industry. In addition, they may lack confidence in their ability to sustain Lowes.com revenue growth, maintain their inventory levels, and achieve their operating margin targets. Also, they may have concerns about the sustainability of stimulus check benefits as well as the demand for repairs and remodeling. Furthermore, they may be exaggerating the potential of their STAINMASTER brand acquisition and their capacity to accommodate demand surges
Underlying
Lowe's Cos.

Lowe's Companies is a home improvement retailer. The company provides home improvement products in lumber and building materials, appliances, seasonal and outdoor living, tools and hardware, fashion fixtures, rough plumbing and electrical, paint, millwork, lawn and garden, flooring, and kitchens categories. The company provides installation services through independent contractors in product categories, including appliances, flooring, kitchens, lumber and building materials, and millwork. The company also provides extended protection plans for various products within the appliances, kitchens, fashion fixtures, millwork, rough plumbing and electrical, seasonal and outdoor living, and tools and hardware categories.

Provider
Valens Research
Valens Research

In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:

  • GAAP and IFRS have failed to provide rules for reliable financial statement reporting
  • Stock analyst recommendations are not grounded in disciplined financial analysis
  • Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
  • Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available

We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.

  • Corporate credit ratings remain years behind the fundamental underpinnings of company performance
  • Stock analysts continue to make recommendations with deeply inherent biases
  • Research firms have failed to break down the walls between credit, equity, and macroeconomic research
  • The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming

The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.

Analysts
Valens Research

Other Reports on these Companies
Other Reports from Valens Research

ResearchPool Subscriptions

Get the most out of your insights

Get in touch