Is Lowe's Companies, Inc. overvalued or undervalued?

As of 18 August 2021, the valuation grade for Lowe's Companies, Inc. moved from attractive to risky, indicating a potential shift in investor sentiment. The company appears to be overvalued, with a P/E ratio of 19 compared to its peer, The Home Depot, Inc., which has a significantly higher P/E of 49.96. Additionally, Lowe's EV to EBITDA ratio stands at 13.04, suggesting a premium relative to its earnings before interest, taxes, depreciation, and amortization.
In terms of peer comparison, Lowe's has a higher EV to EBIT ratio of 15.61 compared to The Home Depot's 30.49, which further emphasizes the valuation concerns. Despite a strong ROCE of 54.43%, the negative book value (BV) and the low dividend yield of 1.15% add to the risk profile. Over the past year, Lowe's stock has returned 4.26%, significantly lagging behind the S&P 500's return of 17.14%, reinforcing the notion that the stock may be overvalued at its current price.