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 new target is approximately 40 % higher compared to Lowe’s most recent closing stock price.
Gutman made his modification on the belief that the current average analyst earnings projections for the business underestimate a critical factor: demand for home improvement goods and services. The prognosticator feels it’s realistic that Lowe’s will hit its goal of a 12 % EBIT (earnings before interest as well as 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 published in the newest research note of his on the business.
Gutman feels the broader DIY list landscape will generally reap some benefits from the anticipated rise 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 13 % for Lowe’s and six % for Home Depot.
The Morgan Stanley analyst has additionally raised his price target for Home Depot stock, although not as drastically. It’s now $300, out of the former $295. The new level is actually 14 % 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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