Lowe’s Stock Could Blast 40 % 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 do retailer, upping it to $210 per share from the previous $190 while maintaining his obese (read: buy) recommendation.
The brand new objective is roughly 40 % higher than Lowe’s most recent closing stock price.
Gutman made his modification on the perception that the present typical analyst earnings projections for the business underestimate a crucial factor: need for home improvement goods as well as services. The prognosticator feels it’s realistic that Lowe’s is going to hit its goal of a twelve % EBIT (earnings before interest and taxes) margin in 2021.
“Indeed, we believe [Lowe’s] will nearly reach it in 2020 on a’ normalized’ [profit and loss]. This is not appreciated by the market,” he have written in his latest research note on the business.
Gutman feels the broader DIY retail landscapes will generally reap some benefits from the anticipated increase in demand. As 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 thirteen % for Lowe’s and 6 % for Home Depot.
The Morgan Stanley analyst in addition has raised his price target for Home Depot inventory, however, not as dramatically. It is these days $300, from the former $295. The brand new level is 14 % above Home Depot’s most recent closing stock price.
Neither business 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 almost 1.6 %.
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