Lowe’s Stock Could Blast 40 % 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 overweight (read: buy) recommendation.
The new goal is around 40 % higher compared to Lowe’s most recent closing stock price.
Gutman made the revision of his on the notion that the present typical analyst earnings projections for the business underestimate an important factor: need for home improvement goods as well as services. The prognosticator feels it is practical that Lowe’s will hit the target of its of a twelve % EBIT (earnings before interest as well as taxes) margin in 2021.
“Indeed, we believe [Lowe’s] will nearly reach it in 2020 on a’ normalized’ [profit as well as loss]. This is not appreciated by the market,” he had written in the latest research note of his on the business.
Gutman thinks the broader DIY list landscape will generally benefit from the anticipated increase in demand. As 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 has additionally raised his price target for Home Depot stock, although not as significantly. It is currently $300, from the former $295. The brand new level is fourteen % above Home Depot’s most recent closing stock price.
Neither business enterprise 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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