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Lowe's Companies, Inc. (NYSE:LOW) saw significant share price movement during recent months on the NYSE, rising to highs of US$268 and falling to the lows of US$212. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Lowe's Companies' current trading price of US$221 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Lowe's Companies’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What's The Opportunity In Lowe's Companies?
Great news for investors – Lowe's Companies is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is $296.64, but it is currently trading at US$221 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Lowe's Companies’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Check out our latest analysis for Lowe's Companies
What does the future of Lowe's Companies look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by a double-digit 15% over the next couple of years, the outlook is positive for Lowe's Companies. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? Since LOW is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on LOW for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy LOW. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.