Lowe’s Stock Could Blast 40 % 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 his price target on the do retailer, upping it to $210 per share from the previous $190 while keeping his obese (read: buy) recommendation.
The brand new target is around forty % higher compared to Lowe’s most recent closing stock price.
Gutman made the revision of his on the belief that the current average analyst earnings projections for the business enterprise underestimate a critical factor: need for home improvement goods and services. The prognosticator feels it is practical that Lowe’s is going to hit the target of its of a twelve % EBIT (earnings before interest and taxes) margin in 2021.
“Indeed, we think [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 the newest research note of his on the business.
Gutman thinks the broader DIY retail landscape will generally gain from the anticipated increase in 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 6 % for Home Depot.
The Morgan Stanley analyst in addition has raised the price target of his for Home Depot stock, however, not as considerably. It’s now $300, from the former $295. The brand 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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