Lowe’s Stock Could Blast forty % Higher, As reported by Analyst
A prominent Lowe’s (NYSE:LOW) bull is charging harder on the company’s stock. Morgan Stanley analyst Simeon Gutman on Friday raised the price target of his on the home improvement retailer, upping it to $210 per share from the preceding $190 while keeping his obese (read: buy) recommendation.
The new objective is approximately 40 % higher than Lowe’s most recent closing stock price.
Gutman made his revision on the perception that the present typical analyst earnings projections for the business enterprise underestimate a crucial factor: need for home improvement goods and services. The prognosticator feels it is practical that Lowe’s will hit the goal of its 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 and loss]. This’s not appreciated by the market,” he wrote in the latest research note of his on the business.
Gutman thinks the broader DIY list landscape will generally reap some benefits 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 6 % for Home Depot.
The Morgan Stanley analyst has also raised the price target of his for Home Depot inventory, though not as significantly. It is currently $300, from the former $295. The brand 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 almost 1.6 %.
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