Lowe’s Stock Could Blast forty % 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 previous $190 while keeping his overweight (read: buy) recommendation.
The brand new objective is roughly forty % higher than Lowe’s most recent closing stock price.
Gutman made his modification on the belief that the present average analyst earnings projections for the company underestimate a crucial factor: need for home improvement goods and services. The prognosticator feels it is reasonable that Lowe’s will hit its target of a twelve % EBIT (earnings before interest as well as taxes) margin in 2021.
“Indeed, we believe [Lowe’s] will almost reach it in 2020 on a’ normalized’ [profit and loss]. This is not appreciated by the market,” he published in the latest research note of his on the business.
Gutman thinks the broader DIY list landscape will generally benefit from the anticipated increasing amount of 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 6 % for Home Depot.
The Morgan Stanley analyst has also raised the price target of his for Home Depot inventory, though not as considerably. It’s now $300, out of the former $295. The brand new level is actually 14 % above Home Depot’s most recent closing stock price.
Neither company 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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