Using the PEG framework with analyst consensus forward EPS growth of 8.6% plus 2.0% dividend yield, Lowe's Companies, Inc. has a fair value of $107.96 based on NTM EPS (FY2027) of $12.61. The current PEG ratio is 2.18.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
PEG tends to undervalue slow growers — consider dividend yield and asset value instead.
| EPS Growth RateForward | 6.6% |
| Dividend Yield | +2.0% |
| Adjusted Growth (clamped 8–25%) | 8.6% |
| Fair P/E | 8.6x |
| NTM EPS (FY2027) | $12.61 |
| Fair Value | $107.96 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $11.85 | — | — |
| FY2027E | $12.61 | +6.4% | 25 |
| FY2028E | $13.68 | +8.5% | 25 |
| FY2029E | $14.99 | +9.6% | 15 |
| FY2030E | $16.46 | +9.8% | 7 |
| FY2031E | $17.36 | +5.4% | 9 |
6Y Forward EPS CAGR: 6.6%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $8.4B | $12.03 | — |
| FY2022 | $6.4B | $10.17 | -15.5% |
| FY2023 | $7.7B | $13.20 | +29.8% |
| FY2024 | $7.0B | $12.23 | -7.3% |
| FY2025 | $6.7B | $11.85 | -3.1% |
4Y Historical EPS CAGR: -0.4%
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.