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 earlier $190 while keeping his overweight (read: buy) recommendation.
The brand new objective is approximately forty % higher than Lowe’s most recent closing stock price.
Gutman made the revision of his on the belief that the current typical analyst earnings projections for the business enterprise underestimate a crucial factor: need for home improvement goods and services. The prognosticator feels it is reasonable that Lowe’s is going to hit its goal of a 12 % EBIT (earnings before interest as well as taxes) margin in 2021.
“Indeed, we feel [Lowe’s] will almost reach it in 2020 on a’ normalized’ [profit and loss]. This is not valued by the market,” he had written in the latest research note of his on the business.
Gutman thinks the broader DIY retail landscapes will generally reap some benefits from the anticipated increase in 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 thirteen % for Lowe’s and six % for Home Depot.
The Morgan Stanley analyst has additionally raised his price target for Home Depot stock, however, not as drastically. It’s now $300, out of the former $295. The brand new level is actually 14 % above Home Depot’s most recent closing stock price.
Neither business enterprise 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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