Lowe’s Stock Could Blast 40 % 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 the price target of his on the do retailer, upping it to $210 per share from the preceding $190 while keeping his obese (read: buy) recommendation.
The new target is exactly 40 % higher compared to Lowe’s most recent closing stock price.
Gutman made his modification on the belief that the current typical analyst earnings projections for the business underestimate a critical factor: need for home improvement goods and services. The prognosticator feels it is reasonable that Lowe’s is going to hit the target of its of a 12 % EBIT (earnings before interest and taxes) margin in 2021.
“Indeed, we feel [Lowe’s] will nearly reach it in 2020 on a’ normalized’ [profit as well as loss]. This’s not valued by the market,” he wrote in his newest research note on the company.
Gutman thinks the broader DIY list landscapes will typically gain 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 13 % for Lowe’s and six % for Home Depot.
The Morgan Stanley analyst has also raised the price target of his for Home Depot inventory, even thought 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 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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