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 his price target on the home improvement retailer, upping it to $210 per share from the earlier $190 while maintaining his obese (read: buy) recommendation.
The brand new target is approximately forty % higher compared to Lowe’s most recent closing stock price.
Gutman made the revision of his on the notion that the present average analyst earnings projections for the business underestimate a crucial factor: demand for home improvement goods as well as services. The prognosticator feels it is practical that Lowe’s is going to hit its goal 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 is not valued by the market,” he wrote in his newest research note on the business.
Gutman feels the broader DIY list landscape will generally benefit from the anticipated rise 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 the price target of his for Home Depot inventory, nevertheless, not as drastically. It’s now $300, out of the former $295. The brand new level is fourteen % above Home Depot’s most recent closing stock price.
Neither business 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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