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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 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
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.

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