Lowe’s Stock Could Blast 40 % 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 do retailer, upping it to $210 per share from the earlier $190 while maintaining his obese (read: buy) recommendation.
The brand new target is approximately forty % higher compared to Lowe’s most recent closing stock price.
Gutman made his revision on the belief that the current typical analyst earnings projections for the business enterprise underestimate an important factor: demand for home improvement goods and services. The prognosticator feels it’s reasonable that Lowe’s will hit its target of a 12 % EBIT (earnings before interest as well as taxes) margin in 2021.
“Indeed, we believe [Lowe’s] will nearly reach it in 2020 on a’ normalized’ [profit as well as loss]. This’s not valued by the market,” he had written in the newest research note of his on the company.
Gutman feels the broader DIY list landscape will generally benefit from the anticipated increase in demand. As 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 6 % for Home Depot.
The Morgan Stanley analyst has additionally raised his price target for Home Depot inventory, although not as dramatically. It’s now $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 place 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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