Lowe’s Stock Could Blast 40 % Higher, According to Analyst
A prominent Lowe’s (NYSE:LOW) bull is actually charging harder on the company’s stock. Morgan Stanley analyst Simeon Gutman on Friday raised his price target on the home improvement retailer, upping it to $210 per share from the preceding $190 while keeping his overweight (read: buy) recommendation.
The new target is exactly 40 % higher compared to Lowe’s most recent closing stock price.
Gutman made the modification of his on the belief that the current average analyst earnings projections for the business enterprise underestimate a critical factor: demand for home improvement goods and services. The prognosticator feels it’s realistic that Lowe’s is going to hit the goal of its of a 12 % EBIT (earnings before interest and taxes) margin in 2021.
“Indeed, we believe [Lowe’s] will nearly reach it in 2020 on a’ normalized’ [profit and loss]. This’s not appreciated by the market,” he had written in the latest research note of his on the company.
Gutman thinks the broader DIY list landscape will generally 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 6 % for Home Depot.
The Morgan Stanley analyst in addition has raised his price target for Home Depot inventory, even thought not as significantly. It is now $300, out of the former $295. The brand new level is 14 % 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 nearly 1.6 %.
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