Lowe’s Stock Could Blast 40 % Higher, As reported by 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 prior $190 while maintaining his overweight (read: buy) recommendation.
The new goal is exactly 40 % higher than Lowe’s most recent closing stock price.
Gutman made his modification on the belief that the present typical analyst earnings projections for the business enterprise underestimate a crucial factor: demand for home improvement goods and services. The prognosticator feels it’s practical that Lowe’s is going to hit its target of a 12 % EBIT (earnings before interest as well as taxes) margin in 2021.
“Indeed, we think [Lowe’s] will nearly reach it in 2020 on a’ normalized’ [profit and loss]. This’s not appreciated by the market,” he wrote in his latest research note on the company.
Gutman feels the broader DIY list landscape will generally reap some benefits from the anticipated rise in demand. To be 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 6 % for Home Depot.
The Morgan Stanley analyst in addition has raised the price target of his for Home Depot stock, although not as dramatically. 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 almost 1.6 %.
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