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 his price target on the do retailer, upping it to $210 per share from the preceding $190 while keeping his obese (read: buy) recommendation.
The brand new target is around forty % higher than Lowe’s most recent closing stock price.
Gutman made his modification on the belief that the current typical analyst earnings projections for the business enterprise underestimate an important factor: demand for home improvement goods and services. The prognosticator feels it’s practical that Lowe’s will hit the target of its of a twelve % 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 and loss]. This is not appreciated by the market,” he published in his latest research note on the company.
Gutman believes the broader DIY list landscape will generally benefit 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 thirteen % for Lowe’s and 6 % for Home Depot.
The Morgan Stanley analyst has also raised the price target of his for Home Depot stock, even thought not as significantly. It is currently $300, from the former $295. The brand new level is actually 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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