Lowe’s Stock Could Blast forty % Higher, According to 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 previous $190 while maintaining his obese (read: buy) recommendation.
The brand new goal is around forty % higher than Lowe’s most recent closing stock price.
Gutman made the modification of his on the perception that the present typical analyst earnings projections for the business enterprise underestimate an important factor: need for home improvement goods as well as services. The prognosticator feels it is realistic that Lowe’s is going to 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 and loss]. This is not valued by the market,” he wrote in his newest research note on the business.
Gutman believes the broader DIY list landscapes will typically reap some benefits 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 13 % for Lowe’s and six % for Home Depot.
The Morgan Stanley analyst in addition has raised his price target for Home Depot inventory, nonetheless, not as drastically. It’s 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 almost 1.6 %.
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