Presented by:

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Presented by Anel Koldassova Anwar
Mamora Thushan Perera _______________ Ngan
Lien Dewi Haspari

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Mission Statement
Lowe's vision is to be our Customers' first
choice for home improvement in each and every
market we serve. To earn our Customers' trust and
meet their individual needs, we will provide
valued solutions with the best prices, products
and services that make our Customers' lives
easier.
Although times have changed since Lowe's first
opened its doors in 1946, Lowe's values have not.
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History
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Lowe's in The Community

• Habitat for Humanity International
• American Red Cross
• Lowe's Charitable and Educational Foundation
• Home Safety Council
• Lowes Heroes

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Interesting Facts

• More than 26,000 jobs created in 2003
• 10 Low Price Guarantee
• Second largest appliance retailer
• Serve approximately 11 million shoppers a week

Awards

• 2005, 2004 and 2003 ENERGY STAR Retail Partner
  of the Year
• TVA's Green Power Switch Leadership Award
  Recipient
• Lowe's Wood Policy

Financial Facts

• FORTUNE Magazine's 2004 and 2003 Most Admired
  Specialty Retailer
• Ranked 50th on the FORTUNE 500 and ninth on the
  Business Week 50 lists

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Executive Bios
Robert A. Niblock Chairman, President
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Executive Bios
Robert F. Hull, Jr. Executive Vice President and
Chief Financial Officer
Larry Stone Senior Executive Vice President,
Operations
Dale Pond Senior Executive Vice President,
Merchandising/ Marketing
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Lowe's Ownership
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Insider Trading
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Home Improvement Products

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Other Products
EXCLUSIVE AT LOWES Hitachi, TROY-BILT, KOBALT,
AND MORE
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Companys Sale breakdown
other
Lowes revenue comes from different categories as
listed above however, the major sources of its
revenue are from appliances composed of 11
(4,078 millions) of total sales and lumber
contributes 9 (3,288 millions) of the total
sales.
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Lowes vs. Competitors
(44.64 bill.)
(86.58 bill.)

• Currently, Lowes is second in terms of
  market capitalization in the retail hardware
  sector holding 32 (44.64 billions). Home Depot
  has a commanding lead with 62 (86.58 billions)
  of the market share.

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Industry Sales Breakdown
(37.7 billions)
(74.52 billions)

• Lowes sales ranks number two in the retail
  hardware sector. Home Depot is the industry
  leader generating 61 (74.52 billions) of the
  industry sales. Lowes generates 30 (37.7
  billions) of the sales in the industry.

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Financial Ratios -
Strength
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Financial Ratios -
Weakness
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Financial Ratios-
Opportunity
Improving these ratios Lowes has a potential to
a greater SUCCESS!!!
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Holding Period Return
Beginning Price
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Free Cash Flow Equity
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Discounted Cash Flow
Use Ke in the constant dividend growth model
to calculate for Cost of Capital because its
value is less 1.00 and positive
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Risk Analysis
STRENGTH because Beta is decreasing ? Less Risk
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Cost of Capital
0.2072 0.0141
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Cost of Capital and Optimal Capital sturcture
WACC
Lowes Companies, Inc. issue no preferred stock
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Lowe's Capital Structure
Currently, Lowes debt has decreased to 20
percent while is equity has accumulated up to 80
percent. Its debt to equity ratio will
definitely attract investors because it clearly
indicated that the company has used their free
cash flow to payoff all of its debt.
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MM Proposition
NO MODEL
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Market Efficieny

• Specific News

Lowe's Reports Record First Quarter
Earnings May 16, 2005 Lowes reported net
earnings of 590 million for the quarter ended
April 29, 2005, a 30.5 percent increase over the
same period a year ago. Sales for the quarter
increased 14.2 percent to 9.91 billion, up from
8.68 billion in the first quarter of 2004.
Comparable store sales for the first quarter
increased 3.8 percent.
WEAK FORM GOOD NEWS
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Market Efficieny
Non Specific News

• Possible Oil Price Increase Does Not Affect
  Market
• June 13, 2005 (AXcess News) New York - The
  Organization of Petroleum Exporting Countries,
  OPEC, said it is looking into raising production
  for the second time this year now that oil is
  over 50 a barrel.
• In 2005, oil prices rose over 40 percent, even
  with increases in OPEC production. OPEC
  represents about 40 percent of the world's oil
  production.

WEAK FORM BAD NEWS
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5-Year Stock Price
Splits 29-Jun-92 21, 04-Apr-94 21,
29-Jun-98 21, 02-Jul-01 21
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Strengths

• 5 Insider Ownership traded Lowes shares since
  March 2005.
• Market Place second largest company in the home
  improvement industry.
• Financial Ratios
• Growth Ratios
• Price Ratios
• Management Efficiency
• Increasing Net Income
• Rapidly increasing FCFE (2004 FCFE 740 million)
• Decreasing Beta to 0.9
• Increasing HPR (from 7.75 to 15.35)

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WEAKNESSES

• Board of Directors
• Low Profit Margin

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Buy, Hold, or Sell?
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• Our recommendation BUY
• Based on the following
• Stable and increasing trend of 5 Year stock price
• Positive Expected HPR ? 15.35
• It is under priced Ke(DCF Model) Ke(CAPM)
  0.2072 0.0141
• Strengths Weaknesses
• Analysts Opinions
• Decreasing Beta ? 0.9
• Debt/Equity Ratio ? 0.25
• Increasing Net Income
• Increasing FCFE
• Strong Financial Ratios