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 the price target of his on the do retailer, upping it to $210 per share from the prior $190 while maintaining his overweight (read: buy) recommendation.
The brand new target is approximately 40 % higher than Lowe’s most recent closing stock price.
Gutman made his revision on the notion that the present average analyst earnings projections for the company underestimate an important factor: need for home improvement goods and services. The prognosticator feels it is realistic that Lowe’s is going to hit its target of a twelve % EBIT (earnings before interest and taxes) margin in 2021.
“Indeed, we believe [Lowe’s] will almost reach it in 2020 on a’ normalized’ [profit and loss]. This’s not appreciated by the market,” he published in his latest research note on the company.
Gutman believes the broader DIY list landscapes will typically benefit from the anticipated increasing amount of demand. To be 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 in addition has raised the price target of his for Home Depot inventory, nonetheless, not as considerably. It’s currently $300, from the former $295. The new level is 14 % above Home Depot’s most recent closing stock price.
Neither business 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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