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 maintaining his overweight (read: buy) recommendation.
The new target is approximately forty % higher than Lowe’s most recent closing stock price.
Gutman made the modification of his on the notion that the present typical analyst earnings projections for the business enterprise underestimate an important factor: need for home improvement goods and services. The prognosticator feels it’s realistic that Lowe’s will hit its target of a twelve % EBIT (earnings before interest as well as taxes) margin in 2021.
“Indeed, we feel [Lowe’s] will almost reach it in 2020 on a’ normalized’ [profit and loss]. This’s not valued by the market,” he had written in the latest research note of his on the company.
Gutman thinks the broader DIY retail landscapes will generally gain from the anticipated increase 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 thirteen % for Lowe’s and six % for Home Depot.
The Morgan Stanley analyst in addition has raised the price target of his for Home Depot inventory, though not as considerably. It is now $300, from the former $295. The new level is 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 almost 1.6 %.
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