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 his price target 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 roughly 40 % higher than Lowe’s most recent closing stock price.
Gutman made the modification of his on the belief that the present average analyst earnings projections for the business enterprise underestimate a crucial factor: demand for home improvement goods as well as services. The prognosticator feels it is realistic that Lowe’s will hit the target of its of a twelve % EBIT (earnings before interest and taxes) margin in 2021.
“Indeed, we feel [Lowe’s] will almost reach it in 2020 on a’ normalized’ [profit as well as loss]. This’s not appreciated by the market,” he published in his latest research note on the company.
Gutman feels the broader DIY retail landscape will generally gain from the anticipated increase in demand. Being 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 6 % for Home Depot.
The Morgan Stanley analyst in addition has raised the price target of his for Home Depot stock, nonetheless, not as drastically. It is currently $300, out of the former $295. The brand 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 nearly 1.6 %.
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