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 previous $190 while keeping his overweight (read: buy) recommendation.
The brand new objective is roughly 40 % higher than Lowe’s most recent closing stock price.
Gutman made the modification of his on the perception that the present typical analyst earnings projections for the business underestimate a critical factor: need for home improvement goods and services. The prognosticator feels it is realistic that Lowe’s will hit its target of a 12 % 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 is not appreciated by the market,” he published in his latest research note on the company.
Gutman thinks the broader DIY retail landscape will typically reap some benefits from the anticipated increase in 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 six % for Home Depot.
The Morgan Stanley analyst has additionally raised his price target for Home Depot stock, even thought not as drastically. It is these days $300, from the former $295. The new level is actually 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 almost 1.6 %.
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