Lowe’s Stock Could Blast forty % Higher, As reported by 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 prior $190 while maintaining his overweight (read: buy) recommendation.
The brand new objective is around forty % higher than Lowe’s most recent closing stock price.
Gutman made his modification on the belief that the current average analyst earnings projections for the business underestimate a critical factor: need for home improvement goods and services. The prognosticator feels it is reasonable 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 think [Lowe’s] will nearly reach it in 2020 on a’ normalized’ [profit as well as loss]. This’s not appreciated by the market,” he wrote in the latest research note of his on the company.
Gutman feels the broader DIY retail landscapes will generally gain from the anticipated increase in demand. As a result, his per-share earnings estimates 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 his price target for Home Depot inventory, though not as considerably. It’s currently $300, from the former $295. The new level is actually 14 % 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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