Lowe’s Stock Could Blast forty % 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 preceding $190 while maintaining his overweight (read: buy) recommendation.
The new objective is roughly forty % higher compared to Lowe’s most recent closing stock price.
Gutman made the revision of his on the perception that the current average analyst earnings projections for the business enterprise underestimate a critical factor: need for home improvement goods as well as services. The prognosticator feels it is reasonable that Lowe’s is going to hit the goal of its of a 12 % EBIT (earnings before interest as well as taxes) margin in 2021.
“Indeed, we think [Lowe’s] will almost reach it in 2020 on a’ normalized’ [profit as well as loss]. This’s not valued by the market,” he have written in the latest research note of his on the company.
Gutman believes the broader DIY retail landscapes will typically benefit 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 13 % for Lowe’s and six % for Home Depot.
The Morgan Stanley analyst has additionally raised the price target of his for Home Depot stock, although not as significantly. It is 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 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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