Lowe’s Stock Could Blast 40 % Higher, Based on Analyst
A prominent Lowe’s (NYSE:LOW) bull is actually charging harder on the company’s stock. Morgan Stanley analyst Simeon Gutman on Friday raised the price target of his on the do retailer, upping it to $210 per share from the earlier $190 while keeping his obese (read: buy) recommendation.
The brand new goal is around 40 % higher than Lowe’s most recent closing stock price.
Gutman made his modification on the belief that the current typical analyst earnings projections for the business underestimate a crucial factor: demand for home improvement goods and services. The prognosticator feels it’s reasonable 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 feel [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 believes the broader DIY retail landscape will typically gain from the anticipated rise in demand. Being 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 six % for Home Depot.
The Morgan Stanley analyst has also raised his price target for Home Depot inventory, even thought not as considerably. It is currently $300, out of the former $295. The new level is 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 nearly 1.6 %.
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