Lowe’s Stock Could Blast forty % Higher, According to 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 do retailer, upping it to $210 per share from the earlier $190 while keeping his overweight (read: buy) recommendation.
The new goal is around 40 % 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 company underestimate an important factor: need 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 and 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 appreciated by the market,” he wrote in his latest research note on the business.
Gutman feels the broader DIY retail landscapes will generally benefit from the anticipated increasing amount of 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 6 % for Home Depot.
The Morgan Stanley analyst has additionally raised the price target of his for Home Depot stock, although not as drastically. It is these days $300, out of 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 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 almost 1.6 %.
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