LOW – Market expectations are for Uniform ROA to remain stable, but management may have concerns about outlook, margins, and positioning
October 22, 2021
- Lowe’s Companies, Inc. (LOW:USA) currently trades around corporate averages relative to Uniform earnings, with a 24.0x Uniform P/E (Fwd. V/E’).
- At these levels, markets are pricing in expectations for Uniform ROA to remain stable at 18%-19% levels through 2025, accompanied by 3% Uniform asset growth going forward.
- Meanwhile, analyst expectations for 17% Uniform ROA and immaterial Uniform asset growth would imply a stock price near $168, representing approximately 22% equity downside for the firm.
- Moreover, the firm’s most recent earnings call suggests management may have concerns about their outlook, margins, and market positioning.
