Lowe’s Stock Could Blast forty % 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 preceding $190 while keeping his overweight (read: buy) recommendation.
The brand new target is roughly forty % higher than Lowe’s most recent closing stock price.
Gutman made the modification of his on the perception that the present average analyst earnings projections for the business enterprise 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 its target of a twelve % EBIT (earnings before interest and taxes) margin in 2021.
“Indeed, we believe [Lowe’s] will almost reach it in 2020 on a’ normalized’ [profit and loss]. This’s not appreciated by the market,” he wrote in his newest research note on the business.
Gutman feels the broader DIY list landscape will generally reap some benefits from the anticipated increasing amount of demand. Being 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 additionally raised the price target of his for Home Depot inventory, however, not as drastically. 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 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 almost 1.6 %.
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