Lowe’s Stock Could Blast 40 % Higher, Based on 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 do retailer, upping it to $210 per share from the prior $190 while keeping his obese (read: buy) recommendation.
The new goal is around forty % higher compared to Lowe’s most recent closing stock price.
Gutman made the revision of his on the notion that the current average analyst earnings projections for the business enterprise underestimate an important factor: need for home improvement goods and services. The prognosticator feels it is reasonable that Lowe’s will hit its goal of a 12 % EBIT (earnings before interest as well as taxes) margin in 2021.
“Indeed, we feel [Lowe’s] will nearly reach it in 2020 on a’ normalized’ [profit and loss]. This is not appreciated by the market,” he published in the latest research note of his on the company.
Gutman feels the broader DIY list landscape will typically 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, though not as significantly. It is these days $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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