Lowe’s (LOW): Assessing Valuation After a Year of Mixed Share Performance

Lowe's Companies (LOW) shares have delivered mixed returns over the past year, with the stock down 12% but still showing strong gains over longer periods. Investors have eyed the company’s recent performance and profitability trends, looking for direction.

See our latest analysis for Lowe's Companies.

While Lowe's Companies’ 12% drop in total shareholder return over the past year has weighed on sentiment, the past three and five-year returns of nearly 16% and 75% indicate the long-term story is still one of solid growth. Recent share price momentum appears muted as investors await clearer signs of renewed strength or changing risks.

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With Lowe’s trading nearly 20% below analyst targets and its fundamentals remaining healthy, is this a window for value hunters, or has the market already factored in all its future growth potential?

Most Popular Narrative: 16.7% Undervalued

Lowe’s last closed at $234.70, while the most popular narrative values the company at $281.84 using a discount rate of 8.8%. This substantial gap places a spotlight on some bold assumptions about future performance and sector leadership.

Ongoing pent-up demand from delayed home improvement projects, combined with record-high aging U.S. housing stock and an estimated 18 million new homes needed by 2033, points to a significant runway for future growth in renovation, repair, and new construction. This is expected to positively affect revenue and support sustained top-line expansion as the housing cycle recovers.

Read the complete narrative.

Curious to know what future sales figures and profit margins underpin this valuation? The real twist is that analysts are banking on trends that could push Lowe’s far beyond today’s expectations. See the full picture behind the number.

Result: Fair Value of $281.84 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, integration challenges from recent acquisitions and persistent labor shortages could undermine Lowe’s growth ambitions and put pressure on margins moving forward.

Find out about the key risks to this Lowe's Companies narrative.

Another View: Multiples Tell a Different Story

Looking at pricing through one key valuation ratio, Lowe’s trades at 19.2x earnings, which is above the US Specialty Retail industry average of 17.8x. However, compared to peers, its ratio is much lower than the 30.8x average. The fair ratio model suggests 20.9x, which hints the stock could still move higher if sentiment improves. Do multiples suggest opportunity or greater risk at current levels?

Story Continues

See what the numbers say about this price — find out in our valuation breakdown.NYSE:LOW PE Ratio as at Nov 2025

Build Your Own Lowe's Companies Narrative

If you see things differently or want to dive deeper into your own analysis, you can build your own narrative in just a few minutes. Do it your way

A great starting point for your Lowe's Companies research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include LOW.

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