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 prior $190 while maintaining his overweight (read: buy) recommendation.
The brand new target is around 40 % higher than Lowe’s most recent closing stock price.
Gutman made his revision on the perception that the present average analyst earnings projections for the company underestimate an important factor: need for home improvement goods and services. The prognosticator feels it is practical that Lowe’s is going to hit its target of a twelve % EBIT (earnings before interest as well as taxes) margin in 2021.
“Indeed, we believe [Lowe’s] will almost reach it in 2020 on a’ normalized’ [profit as well as loss]. This’s not valued by the market,” he had written in his newest research note on the business.
Gutman feels the broader DIY list landscape will typically gain from the anticipated increasing amount of demand. To be 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, though not as dramatically. It is these days $300, from the former $295. The new level is fourteen % above Home Depot’s most recent closing stock price.
Neither company 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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