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 the price target of his on the do retailer, upping it to $210 per share from the earlier $190 while maintaining his obese (read: buy) recommendation.
The brand new target is roughly 40 % higher compared to Lowe’s most recent closing stock price.
Gutman made the revision of his on the notion that the current typical analyst earnings projections for the company underestimate a crucial factor: need for home improvement goods as well as services. The prognosticator feels it is reasonable 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 nearly reach it in 2020 on a’ normalized’ [profit as well as loss]. This’s not appreciated by the market,” he had written in his latest research note on the business.
Gutman feels the broader DIY list landscape will generally gain from the anticipated rise in demand. Being a result, the per share earnings estimates of his 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 in addition has raised his price target for Home Depot stock, although not as drastically. It is these days $300, out of the former $295. The brand new level is 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 nearly 1.6 %.
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