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 keeping his overweight (read: buy) recommendation.
The new target is around 40 % higher than Lowe’s most recent closing stock price.
Gutman made the revision of his on the notion that the current typical analyst earnings projections for the company underestimate a crucial factor: need for home improvement goods as well as services. The prognosticator feels it’s practical that Lowe’s is going to hit the goal of its of a twelve % EBIT (earnings before interest as well as taxes) margin in 2021.
“Indeed, we think [Lowe’s] will nearly reach it in 2020 on a’ normalized’ [profit and loss]. This’s not valued by the market,” he had written in his latest research note on the company.
Gutman thinks the broader DIY retail landscape will generally reap some benefits from the anticipated increase in demand. As 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 6 % for Home Depot.
The Morgan Stanley analyst has additionally raised the price target of his for Home Depot stock, although not as significantly. It is now $300, out of the former $295. The new level is actually fourteen % 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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