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 the price target of his on the home improvement retailer, upping it to $210 per share from the earlier $190 while maintaining his overweight (read: buy) recommendation.
The new goal is around 40 % higher than Lowe’s most recent closing stock price.
Gutman made his revision on the perception that the present typical analyst earnings projections for the business enterprise underestimate a critical factor: need for home improvement goods as well as services. The prognosticator feels it is realistic that Lowe’s will hit the goal of its of a 12 % 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 is not valued by the market,” he published in his newest research note on the company.
Gutman believes the broader DIY retail landscape will generally gain from the anticipated increase 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 six % for Home Depot.
The Morgan Stanley analyst has also raised the price target of his for Home Depot inventory, however, not as significantly. It is now $300, out of 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 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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