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 preceding $190 while keeping his overweight (read: buy) recommendation.
The new objective is roughly forty % higher than Lowe’s most recent closing stock price.
Gutman made his revision on the perception that the current average analyst earnings projections for the business enterprise underestimate a crucial factor: need for home improvement goods as well as services. The prognosticator feels it’s realistic that Lowe’s will hit its goal of a 12 % EBIT (earnings before interest and taxes) margin in 2021.
“Indeed, we think [Lowe’s] will nearly 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 feels the broader DIY list landscape will typically reap some benefits from the anticipated increasing amount of 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 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, nevertheless, not as considerably. It is currently $300, from the former $295. The brand new level is fourteen % 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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