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 his price target on the do retailer, upping it to $210 per share from the earlier $190 while maintaining his overweight (read: buy) recommendation.
The brand new target is approximately 40 % higher than Lowe’s most recent closing stock price.
Gutman made the revision of his on the belief that the current average analyst earnings projections for the company underestimate an important factor: demand for home improvement goods as well as services. The prognosticator feels it is reasonable that Lowe’s is going to hit its goal of a 12 % EBIT (earnings before interest and taxes) margin in 2021.
“Indeed, we feel [Lowe’s] will almost reach it in 2020 on a’ normalized’ [profit as well as loss]. This is not valued by the market,” he have written in the newest research note of his on the company.
Gutman thinks the broader DIY retail landscapes will generally benefit from the anticipated increase 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 six % for Home Depot.
The Morgan Stanley analyst has also raised the price target of his for Home Depot inventory, nonetheless, not as significantly. It is currently $300, from the former $295. The new level is actually fourteen % above Home Depot’s most recent closing stock price.
Neither company 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 nearly 1.6 %.
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