Lowe’s Stock Could Blast 40 % 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 the price target of his on the home improvement retailer, upping it to $210 per share from the earlier $190 while maintaining his overweight (read: buy) recommendation.
The brand new goal is around forty % higher compared to Lowe’s most recent closing stock price.
Gutman made his modification on the notion that the current average analyst earnings projections for the business enterprise underestimate a critical factor: need for home improvement goods and services. The prognosticator feels it’s practical that Lowe’s will hit its goal of a twelve % 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 his newest research note on the company.
Gutman thinks the broader DIY retail 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 six % for Home Depot.
The Morgan Stanley analyst has additionally raised the price target of his for Home Depot stock, even thought not as dramatically. It is now $300, out of the former $295. The new level is actually 14 % above Home Depot’s most recent closing stock price.
Neither company 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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