Lowe’s Stock Could Blast forty % 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 his price target on the do retailer, upping it to $210 per share from the preceding $190 while maintaining his obese (read: buy) recommendation.
The brand new target is approximately forty % higher than Lowe’s most recent closing stock price.
Gutman made his revision on the belief that the current typical analyst earnings projections for the business underestimate a critical factor: demand for home improvement goods and services. The prognosticator feels it’s reasonable that Lowe’s will hit its target of a 12 % EBIT (earnings before interest and taxes) margin in 2021.
“Indeed, we believe [Lowe’s] will nearly reach it in 2020 on a’ normalized’ [profit as well as loss]. This is not valued by the market,” he published in the newest research note of his on the business.
Gutman feels the broader DIY retail landscapes will typically reap some benefits from the anticipated increase 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 thirteen % for Lowe’s and six % for Home Depot.
The Morgan Stanley analyst in addition has raised his price target for Home Depot inventory, even thought not as dramatically. It is these days $300, out of the former $295. The new level is actually 14 % above Home Depot’s most recent closing stock price.
Neither business enterprise had a memorable day in the market 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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