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 his price target on the home improvement retailer, upping it to $210 per share from the previous $190 while maintaining his overweight (read: buy) recommendation.
The brand new target is around forty % higher compared to Lowe’s most recent closing stock price.
Gutman made the revision of his on the perception that the current typical analyst earnings projections for the company underestimate a crucial factor: demand for home improvement goods and services. The prognosticator feels it’s reasonable 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 nearly reach it in 2020 on a’ normalized’ [profit as well as loss]. This’s not valued by the market,” he published in the newest research note of his on the business.
Gutman feels the broader DIY retail landscapes will generally reap some benefits 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 six % for Home Depot.
The Morgan Stanley analyst has also raised the price target of his for Home Depot stock, however, not as considerably. It’s now $300, out of the former $295. The new level is 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 almost 1.6 %.
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