Lowe’s Stock Could Blast 40 % Higher, Based on 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 previous $190 while maintaining his overweight (read: buy) recommendation.
The brand new goal is roughly forty % higher compared to Lowe’s most recent closing stock price.
Gutman made his revision on the notion that the current typical analyst earnings projections for the company underestimate an important factor: need for home improvement goods as well as services. The prognosticator feels it’s practical that Lowe’s will hit its goal of a twelve % EBIT (earnings before interest and taxes) margin in 2021.
“Indeed, we think [Lowe’s] will almost reach it in 2020 on a’ normalized’ [profit and loss]. This’s not appreciated by the market,” he had written in his latest research note on the company.
Gutman believes 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 thirteen % for Lowe’s and 6 % for Home Depot.
The Morgan Stanley analyst has additionally raised his price target for Home Depot inventory, although not as drastically. It is these days $300, from the former $295. The 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 nearly 1.6 %.
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