Lowe’s Stock Could Blast forty % 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 do retailer, upping it to $210 per share from the preceding $190 while maintaining his overweight (read: buy) recommendation.
The brand new goal is roughly forty % higher than 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 company underestimate an important factor: need 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 twelve % EBIT (earnings before interest as well as taxes) margin in 2021.
“Indeed, we feel [Lowe’s] will nearly reach it in 2020 on a’ normalized’ [profit as well as loss]. This is not valued by the market,” he published in his latest research note on the company.
Gutman believes the broader DIY retail landscapes will generally benefit from the anticipated rise in demand. To be 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 thirteen % for Lowe’s and 6 % for Home Depot.
The Morgan Stanley analyst in addition has raised the price target of his for Home Depot inventory, although not as drastically. It is currently $300, from the former $295. The new level is actually 14 % 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 almost 1.6 %.
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