Stock Analysis on Net

Lowe’s Cos. Inc. (NYSE:LOW)

Enterprise Value to FCFF (EV/FCFF) 

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Free Cash Flow to The Firm (FCFF)

Lowe’s Cos. Inc., FCFF calculation

US$ in millions

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12 months ended: Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020 Feb 1, 2019 Feb 2, 2018
Net earnings 6,437 8,442 5,835 4,281 2,314 3,447
Net noncash charges 5,034 2,798 3,319 2,270 3,112 2,196
Changes in operating assets and liabilities (2,882) (1,127) 1,895 (2,255) 767 (578)
Net cash provided by operating activities 8,589 10,113 11,049 4,296 6,193 5,065
Cash paid for interest, net of amount capitalized, net of tax1 695 630 621 511 433 411
Interest capitalized, net of tax2 3 2 1 2 3
Capital expenditures (1,829) (1,853) (1,791) (1,484) (1,174) (1,123)
Free cash flow to the firm (FCFF) 7,458 8,893 9,879 3,323 5,454 4,356

Based on: 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01), 10-K (reporting date: 2018-02-02).

Item Description The company
FCFF Free cash flow to the firm is the cash flow available to the Lowe’s Cos. Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. Lowe’s Cos. Inc. FCFF decreased from 2021 to 2022 and from 2022 to 2023.

Interest Paid, Net of Tax

Lowe’s Cos. Inc., interest paid, net of tax calculation

US$ in millions

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12 months ended: Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020 Feb 1, 2019 Feb 2, 2018
Effective Income Tax Rate (EITR)
EITR1 28.80% 24.70% 24.60% 23.90% 31.80% 37.20%
Interest Paid, Net of Tax
Cash paid for interest, net of amount capitalized, before tax 976 837 824 671 635 654
Less: Cash paid for interest, net of amount capitalized, tax2 281 207 203 160 202 243
Cash paid for interest, net of amount capitalized, net of tax 695 630 621 511 433 411
Interest Costs Capitalized, Net of Tax
Interest capitalized, before tax 4 3 1 3 5
Less: Interest capitalized, tax3 1 1 1 2
Interest capitalized, net of tax 3 2 1 2 3

Based on: 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01), 10-K (reporting date: 2018-02-02).

1 See details »

2 2023 Calculation
Cash paid for interest, net of amount capitalized, tax = Cash paid for interest, net of amount capitalized × EITR
= 976 × 28.80% = 281

3 2023 Calculation
Interest capitalized, tax = Interest capitalized × EITR
= 4 × 28.80% = 1


Enterprise Value to FCFF Ratio, Current

Lowe’s Cos. Inc., current EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Selected Financial Data (US$ in millions)
Enterprise value (EV) 172,256
Free cash flow to the firm (FCFF) 7,458
Valuation Ratio
EV/FCFF 23.10
Benchmarks
EV/FCFF, Competitors1
Amazon.com Inc. 46.64
Home Depot Inc. 21.57
TJX Cos. Inc. 39.87
EV/FCFF, Sector
Consumer Discretionary Distribution & Retail 40.81
EV/FCFF, Industry
Consumer Discretionary 32.89

Based on: 10-K (reporting date: 2023-02-03).

1 Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.


Enterprise Value to FCFF Ratio, Historical

Lowe’s Cos. Inc., historical EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020 Feb 1, 2019 Feb 2, 2018
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 145,852 173,894 147,046 69,616 102,974 86,157
Free cash flow to the firm (FCFF)2 7,458 8,893 9,879 3,323 5,454 4,356
Valuation Ratio
EV/FCFF3 19.56 19.56 14.88 20.95 18.88 19.78
Benchmarks
EV/FCFF, Competitors4
Amazon.com Inc. 45.92 78.83 74.39
Home Depot Inc. 27.17 25.12 20.22 19.11 21.30
TJX Cos. Inc. 31.93 33.03 18.30 19.08 21.16 25.64
EV/FCFF, Sector
Consumer Discretionary Distribution & Retail 38.32 111.04 130.00 51.35 42.44
EV/FCFF, Industry
Consumer Discretionary 32.37 55.70 66.77 52.40 31.02

Based on: 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01), 10-K (reporting date: 2018-02-02).

1 See details »

2 See details »

3 2023 Calculation
EV/FCFF = EV ÷ FCFF
= 145,852 ÷ 7,458 = 19.56

4 Click competitor name to see calculations.

Valuation ratio Description The company
EV/FCFF Enterprise value to free cash flow to the firm is whole company valuation indicator. Lowe’s Cos. Inc. EV/FCFF ratio increased from 2021 to 2022 and from 2022 to 2023.