Lowe’s Stock Could Blast forty % Higher, Based on Analyst
A prominent Lowe’s (NYSE:LOW) bull is actually charging harder on the company’s stock. Morgan Stanley analyst Simeon Gutman on Friday raised the price target of his on the home improvement retailer, upping it to $210 per share from the previous $190 while keeping his overweight (read: buy) recommendation.
The new goal is exactly 40 % higher compared to Lowe’s most recent closing stock price.
Gutman made the modification of his on the belief that the present average analyst earnings projections for the business underestimate a critical factor: demand for home improvement goods and services. The prognosticator feels it’s realistic that Lowe’s will hit the goal of its of a 12 % EBIT (earnings before interest as well as taxes) margin in 2021.
“Indeed, we feel [Lowe’s] will almost reach it in 2020 on a’ normalized’ [profit and loss]. This is not valued by the market,” he published in his newest research note on the business.
Gutman feels the broader DIY retail landscapes will generally reap some benefits from the anticipated increase in demand. Being a result, the per share earnings estimates of his for both Lowe’s and its arch rival Home Depot (NYSE:HD) are notably above the average for prognosticators following those stocks — by 13 % for Lowe’s and 6 % for Home Depot.
The Morgan Stanley analyst has additionally raised the price target of his for Home Depot inventory, although not as drastically. It’s currently $300, from the former $295. The new level is actually fourteen % above Home Depot’s most recent closing stock price.
Neither company had a memorable day in the market on Friday. Lowe’s shares fell by 1.3 %, against the 0.9 % gain of the S&P 500 index. Home Depot declined by nearly 1.6 %.
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