Lowe’s Stock Could Blast forty % 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 the price target of his on the home improvement retailer, upping it to $210 per share from the earlier $190 while maintaining his overweight (read: buy) recommendation.
The brand new objective is exactly forty % higher compared to Lowe’s most recent closing stock price.
Gutman made his modification on the notion that the present typical analyst earnings projections for the company underestimate a critical factor: demand for home improvement goods and services. The prognosticator feels it is reasonable that Lowe’s is going to hit its target 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 and loss]. This is not valued by the market,” he have written in his latest research note on the business.
Gutman thinks the broader DIY list landscape will generally gain from the anticipated rise 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 six % for Home Depot.
The Morgan Stanley analyst has additionally raised the price target of his for Home Depot stock, however, not as dramatically. It’s these days $300, from 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 almost 1.6 %.
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