Lowe’s Stock Could Blast 40 % Higher, Based on Analyst
A prominent Lowe’s (NYSE:LOW) bull is 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 preceding $190 while maintaining his obese (read: buy) recommendation.
The new target is approximately 40 % higher compared to Lowe’s most recent closing stock price.
Gutman made his modification on the notion that the current average analyst earnings projections for the business enterprise underestimate a critical factor: demand for home improvement goods as well as services. The prognosticator feels it’s realistic that Lowe’s will hit the target 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’s not valued by the market,” he published in his newest research note on the company.
Gutman thinks the broader DIY retail landscape will generally gain from the anticipated increase in demand. To be 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 thirteen % for Lowe’s and six % for Home Depot.
The Morgan Stanley analyst has additionally raised his price target for Home Depot inventory, even thought not as considerably. It is these days $300, from the former $295. The new level is actually fourteen % above Home Depot’s most recent closing stock price.
Neither business enterprise 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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