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 do retailer, upping it to $210 per share from the previous $190 while maintaining his obese (read: buy) recommendation.
The brand new target is around forty % higher compared to Lowe’s most recent closing stock price.
Gutman made his modification on the belief that the present typical analyst earnings projections for the business underestimate a crucial factor: need for home improvement goods and services. The prognosticator feels it is practical that Lowe’s will hit its target of a 12 % 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 is not valued by the market,” he wrote in his newest research note on the business.
Gutman believes the broader DIY list landscape will generally gain from the anticipated increasing amount of 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 six % for Home Depot.
The Morgan Stanley analyst has additionally raised the price target of his for Home Depot inventory, although not as dramatically. It is currently $300, out of the former $295. The new level is fourteen % 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 nearly 1.6 %.
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