Lowe’s Stock Could Blast 40 % Higher, According to 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 his price target on the home improvement retailer, upping it to $210 per share from the previous $190 while keeping his obese (read: buy) recommendation.
The new goal is approximately forty % higher compared to Lowe’s most recent closing stock price.
Gutman made the modification of his on the perception that the current average analyst earnings projections for the business underestimate a critical factor: demand for home improvement goods as well as services. The prognosticator feels it is reasonable that Lowe’s will hit its goal of a twelve % EBIT (earnings before interest and 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 have written in the newest research note of his on the business.
Gutman thinks the broader DIY retail landscapes will typically gain from the anticipated increasing amount of demand. Being 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 his price target for Home Depot stock, nonetheless, not as dramatically. It is these days $300, from the former $295. The new level is actually 14 % above Home Depot’s most recent closing stock price.
Neither business 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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