Stock Analysis on Net

Lowe’s Cos. Inc. (NYSE:LOW)

Price to FCFE (P/FCFE) 

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Free Cash Flow to Equity (FCFE)

Lowe’s Cos. Inc., FCFE calculation

US$ in millions

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12 months ended: Jan 31, 2025 Feb 2, 2024 Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020
Net earnings 6,957 7,726 6,437 8,442 5,835 4,281
Net noncash charges 2,550 2,642 5,034 2,798 3,319 2,270
Changes in operating assets and liabilities 118 (2,228) (2,882) (1,127) 1,895 (2,255)
Net cash provided by operating activities 9,625 8,140 8,589 10,113 11,049 4,296
Capital expenditures (1,927) (1,964) (1,829) (1,853) (1,791) (1,484)
Net change in commercial paper (499) 499 (941) 220
Net proceeds from issuance of debt 2,983 9,667 4,972 7,929 3,972
Repayment of debt (545) (601) (867) (2,118) (5,618) (1,113)
Free cash flow to equity (FCFE) 7,153 8,059 16,059 11,114 10,628 5,891

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 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).


The financial data from the periods ending in early February and January between 2020 and 2025 present notable trends in cash flow metrics.

Net cash provided by operating activities
There was a significant increase from 4,296 million USD in 2020 to a peak of 11,049 million USD in 2021. Following this peak, the value showed a gradual declining trend, dropping to 10,113 million USD in 2022, 8,589 million USD in 2023, and 8,140 million USD in 2024. However, in 2025, an uptick is observed with the cash flow increasing to 9,625 million USD. This suggests some volatility with a strong improvement initially, a subsequent decline over three years, and a partial recovery in the latest period.
Free cash flow to equity (FCFE)
The FCFE values increased considerably from 5,891 million USD in 2020 to 10,628 million USD in 2021 and further to a high of 11,114 million USD in 2022. There is a marked rise in 2023 with FCFE reaching 16,059 million USD, followed by a steep decrease to 8,059 million USD in 2024 and a further decline to 7,153 million USD in 2025. This pattern indicates strong capital generation capacity from 2020 through 2023, with a significant contraction thereafter, reaching the lowest levels within the six-year span by 2025.

Overall, the company’s operational cash flow showed strong growth initially but experienced some fluctuation with a downward tendency after 2021, though with a slight recovery in 2025. The free cash flow to equity was robust initially and peaked in 2023 but declined sharply over the last two periods, suggesting possible changes in investment, financing activities, or market conditions impacting the cash available to shareholders.


Price to FCFE Ratio, Current

Lowe’s Cos. Inc., current P/FCFE calculation, comparison to benchmarks

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No. shares of common stock outstanding 560,437,659
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions) 7,153
FCFE per share 12.76
Current share price (P) 216.60
Valuation Ratio
P/FCFE 16.97
Benchmarks
P/FCFE, Competitors1
Amazon.com Inc. 87.51
Home Depot Inc. 14.16
TJX Cos. Inc. 32.25
P/FCFE, Sector
Consumer Discretionary Distribution & Retail 51.73
P/FCFE, Industry
Consumer Discretionary 36.90

Based on: 10-K (reporting date: 2025-01-31).

1 Click competitor name to see calculations.

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


Price to FCFE Ratio, Historical

Lowe’s Cos. Inc., historical P/FCFE calculation, comparison to benchmarks

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Jan 31, 2025 Feb 2, 2024 Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020
No. shares of common stock outstanding1 559,706,540 572,184,243 596,356,261 661,561,297 717,256,852 754,948,648
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions)2 7,153 8,059 16,059 11,114 10,628 5,891
FCFE per share3 12.78 14.08 26.93 16.80 14.82 7.80
Share price1, 4 232.89 254.00 190.53 227.60 181.89 67.80
Valuation Ratio
P/FCFE5 18.22 18.03 7.08 13.55 12.28 8.69
Benchmarks
P/FCFE, Competitors6
Amazon.com Inc. 89.69 84.16 240.95 55.66
Home Depot Inc. 13.90 20.12 19.60 19.87 15.41 14.99
TJX Cos. Inc. 33.24 28.74 33.59 10.55 19.71
P/FCFE, Sector
Consumer Discretionary Distribution & Retail 53.08 41.58 51.89 59.10 38.09
P/FCFE, Industry
Consumer Discretionary 39.60 30.84 36.19 82.92 32.04

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 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).

1 Data adjusted for splits and stock dividends.

2 See details »

3 2025 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 7,153,000,000 ÷ 559,706,540 = 12.78

4 Closing price as at the filing date of Lowe’s Cos. Inc. Annual Report.

5 2025 Calculation
P/FCFE = Share price ÷ FCFE per share
= 232.89 ÷ 12.78 = 18.22

6 Click competitor name to see calculations.


The financial data reveals several notable trends in the company's share price, free cash flow to equity (FCFE) per share, and the price-to-FCFE ratio over the six-year period.

Share Price
The share price demonstrates an overall upward trend from 2020 through 2024, increasing significantly from $67.8 to a peak of $254 in 2024. However, this is followed by a slight decline to $232.89 in 2025, indicating some volatility after a period of strong growth.
FCFE per Share
The free cash flow to equity per share rises steadily from $7.8 in 2020 to $26.93 in 2023, suggesting improving cash generation available to shareholders. However, this upward momentum reverses in the subsequent years, with FCFE dropping to $14.08 in 2024 and further to $12.78 in 2025, signaling a contraction in cash flow generation.
Price-to-FCFE Ratio (P/FCFE)
The P/FCFE ratio exhibits fluctuations that reflect the interplay between share price and FCFE per share movements. Initially, the ratio climbs from 8.69 in 2020 to 13.55 in 2022, implying increasing valuation multiples relative to cash flows. In 2023, there is a significant decline to 7.08, driven by a combination of rising FCFE and a lower share price. Subsequently, the ratio sharply increases to over 18 in 2024 and remains elevated in 2025, indicating the market is valuing the company at a higher premium relative to its reduced free cash flow during these years.

In summary, the data suggests strong financial performance up to 2023, characterized by growing share price and cash flow generation. Post-2023, the company experiences a decline in FCFE per share accompanied by elevated valuation multiples, which may indicate market optimism despite decreased cash flow or potential concerns about sustainability of earnings.