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Lowe's (NYSE:LOW) Free Cash Flow per Share

: $9.20 (TTM As of Oct. 2023)
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Lowe's's Free Cash Flow per Share for the three months ended in Oct. 2023 was $0.84. Its Free Cash Flow per Share for the trailing twelve months (TTM) ended in Oct. 2023 was $9.20.

During the past 12 months, the average Free Cash Flow per Share Growth Rate of Lowe's was -19.70% per year. During the past 3 years, the average Free Cash Flow per Share Growth Rate was 43.70% per year. During the past 5 years, the average Free Cash Flow per Share Growth Rate was 23.20% per year. During the past 10 years, the average Free Cash Flow per Share Growth Rate was 16.50% per year. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the FCF Growth Rate using Free Cash Flow per Share data.

The historical rank and industry rank for Lowe's's Free Cash Flow per Share or its related term are showing as below:

LOW' s 3-Year FCF Growth Rate Range Over the Past 10 Years
Min: -162.1   Med: 16.9   Max: 100.5
Current: 43.7

During the past 13 years, Lowe's's highest 3-Year average Free Cash Flow per Share Growth Rate was 100.50% per year. The lowest was -162.10% per year. And the median was 16.90% per year.

LOW's 3-Year FCF Growth Rate is ranked better than
87.94% of 713 companies
in the Retail - Cyclical industry
Industry Median: 0.2 vs LOW: 43.70

Lowe's Free Cash Flow per Share Historical Data

The historical data trend for Lowe's's Free Cash Flow per Share can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Lowe's Annual Data
Trend Jan14 Jan15 Jan16 Jan17 Jan18 Jan19 Jan20 Jan21 Jan22 Jan23
Free Cash Flow per Share
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.18 3.61 12.34 11.82 10.71

Lowe's Quarterly Data
Jan19 Apr19 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23 Apr23 Jul23 Oct23
Free Cash Flow per Share Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.78 -0.48 2.89 5.94 0.84

Competitive Comparison

For the Home Improvement Retail subindustry, Lowe's's Price-to-Free-Cash-Flow, along with its competitors' market caps and Price-to-Free-Cash-Flow data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Lowe's Price-to-Free-Cash-Flow Distribution

For the Retail - Cyclical industry and Consumer Cyclical sector, Lowe's's Price-to-Free-Cash-Flow distribution charts can be found below:

* The bar in red indicates where Lowe's's Price-to-Free-Cash-Flow falls into.



Lowe's Free Cash Flow per Share Calculation

Free Cashflow per Share is the amount of Free Cashflow per outstanding share of the company's stock.

Free Cash Flow is considered one of the most important parameters to measure a company's earnings power by value investors because it is not subject to estimates of Depreciation, Depletion and Amortization (DDA). However, when we look at the Free Cash Flow, we should look from a long term perspective, because any year's Free Cash Flow can be drastically affected by the spending on Property, Plant, & Equipment (PPE) of the business in that year. Over the long term, Free Cash Flow should give pretty good picture on the real earnings power of the company.

Note: GuruFocus does not calculate Free Cash Flow Per Share when Capital Expenditure is 0.

Lowe's's Free Cash Flow Per Share for the fiscal year that ended in Jan. 2023 is calculated as

Free Cash Flow Per Share(A: Jan. 2023 )
=(Cash Flow from Operations+Capital Expenditure)/Shares Outstanding (Diluted Average)
=(8589+-1829)/631.000
=6760/631.000
=10.71

Lowe's's Free Cash Flow Per Share for the quarter that ended in Oct. 2023 is calculated as

Free Cash Flow Per Share(Q: Oct. 2023 )
=(Cash Flow from Operations+Capital Expenditure)/Shares Outstanding (Diluted Average)
=(1064+-579)/577.000
=485/577.000
=0.84

Free Cash Flow per Share for the trailing twelve months (TTM) ended in Oct. 2023 adds up the quarterly data reported by the company within the most recent 12 months, which was $9.20

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Lowe's  (NYSE:LOW) Free Cash Flow per Share Explanation

Free Cash Flow is very close to Warren Buffett's definition of Owner's Earnings, except that in Warren Buffett's Owner's Earnings, the spending for Property, Plant, and Equipment is only for maintenance (replacement), while in the Free Cash Flow calculation, the cost of new Property, Plant, and Equipment due to business expansion is also deducted. There, Free Cash Flow is more conservative than Owner's Earnings.

In Don Yacktman's calculation of forward rate of return, he uses Free Cash Flow for the calculation. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation.

This is what Yacktman said in his March 2012 interview - when the S&P 500 was at 1400:

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over seven years. The reason we use seven years is because research shows that seven years is the length of the typical business cycle.

Therefore, as of Jan23, Lowe's's Forward Rate of Return (Yacktman) % is

Forward Rate of Return (Yacktman) % (Jan23)=Normalized Free Cash Flow/Price+5-Year EBITDA Growth Rate
=9.01466667/190.57+0.2
=24.73 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Free Cash Flow within a report period can be affected by management's decisions of capital spending. Therefore, it is important to look at long term when it comes to Free Cash Flow.


Lowe's Free Cash Flow per Share Related Terms

Thank you for viewing the detailed overview of Lowe's's Free Cash Flow per Share provided by GuruFocus.com. Please click on the following links to see related term pages.


Lowe's (NYSE:LOW) Business Description

Traded in Other Exchanges
Address
1000 Lowes Boulevard, Mooresville, NC, USA, 28117
Lowe's is the second-largest home improvement retailer in the world, operating more than 1,700 stores in the United States, after the 2023 divestiture of its Canadian locations (RONA, Lowe's Canada, Réno-Dépôt, and Dick's Lumber). The firm's stores offer products and services for home decorating, maintenance, repair, and remodeling, with maintenance and repair accounting for two thirds of products sold. Lowe's targets retail do-it-yourself (around 75% of sales) and do-it-for-me customers as well as commercial and professional business clients (around 25% of sales). We estimate Lowe's captures a low-double-digit share of the domestic home improvement market, based on U.S. Census data and management's market size estimates.
Executives
Janice Dupre Little officer: EVP Human Resources 1000 LOWES BOULEVARD, MOORESVILLE NC 28117
Joseph Michael Mcfarland officer: EVP, Stores 1000 LOWE'S BOULEVARD, MOORESVILLE NC 28117
Quonta D Vance officer: EVP, Pro & Home Services 1000 LOWE'S BOULEVARD, MOORESVILLE NC 28117
Donald Frieson officer: EVP, Supply Chain 1000 LOWE'S BOULEVARD, MOORESVILLE NC 28117
William P Boltz officer: EVP, Merchandising 1000 LOWE'S BOULEVARD, MOORESVILLE NC 28117
Seemantini Godbole officer: EVP, Chief Information Officer 1000 LOWE'S BOULEVARD, MOORESVILLE NC 28117
Juliette Williams Pryor officer: EVP, CLO & Corp. Sec. 1000 LOWE'S BOULEVARD, MOORESVILLE NC 28117
Ross W Mccanless officer: SR VP Gen Counsel & Secretary
Scott H Baxter director 400 NORTH ELM STREET, GREENSBORO NC 27401
Taylor Colleen director C/O BILL.COM HOLDINGS, INC., 1800 EMBARCADERO ROAD, PALO ALTO CA 94303
Brandon J Sink officer: EVP, Chief Financial Officer 1000 LOWE'S BOULEVARD, MOORESVILLE NC 28117
Stone West Mary E director C/O HASBRO, INC., 1011 NEWPORT AVENUE, PAWTUCKET RI 02861
Daniel J Heinrich director CLOROX CO, 1221 BROADWAY, OAKLAND CA 94612
David H Batchelder director 1000 LOWE'S BOULEVARD, MOORESVILLE NC 28117
Griggs Dan Clayton Jr officer: Vice President, CAO 1000 LOWES BOULEVARD, MOORESVILLE NC 28117