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 earlier $190 while keeping his overweight (read: buy) recommendation.
The brand new target is roughly forty % higher compared to Lowe’s most recent closing stock price.
Gutman made the modification of his on the notion that the present average analyst earnings projections for the business enterprise underestimate a critical factor: need for home improvement goods as well as services. The prognosticator feels it’s practical that Lowe’s will hit the goal of its of a 12 % EBIT (earnings before interest as well as taxes) margin in 2021.
“Indeed, we believe [Lowe’s] will nearly reach it in 2020 on a’ normalized’ [profit and loss]. This’s not valued by the market,” he published in his latest research note on the business.
Gutman believes the broader DIY retail landscape will generally reap some benefits from the anticipated increasing amount of 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 also raised the price target of his for Home Depot stock, nonetheless, not as significantly. It’s now $300, from the former $295. The brand new level is actually 14 % above Home Depot’s most recent closing stock price.
Neither business enterprise 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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