Lowe’s Stock Could Blast forty % 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 home improvement retailer, upping it to $210 per share from the earlier $190 while keeping his overweight (read: buy) recommendation.
The new goal is roughly 40 % higher than Lowe’s most recent closing stock price.
Gutman made his modification on the notion that the current average analyst earnings projections for the company underestimate a crucial factor: need for home improvement goods as well as services. The prognosticator feels it is realistic that Lowe’s is going to hit the goal of its of a 12 % EBIT (earnings before interest as well as taxes) margin in 2021.
“Indeed, we think [Lowe’s] will nearly reach it in 2020 on a’ normalized’ [profit as well as loss]. This is not appreciated by the market,” he wrote in his latest research note on the business.
Gutman thinks the broader DIY list landscape will typically reap some benefits from the anticipated increase in demand. Being 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 13 % 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’s currently $300, out of 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 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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