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 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 objective is approximately 40 % higher compared to Lowe’s most recent closing stock price.
Gutman made his revision on the belief that the current average analyst earnings projections for the business underestimate a critical factor: demand for home improvement goods as well as services. The prognosticator feels it’s reasonable that Lowe’s will hit its goal of a twelve % EBIT (earnings before interest and taxes) margin in 2021.
“Indeed, we feel [Lowe’s] will almost reach it in 2020 on a’ normalized’ [profit and loss]. This’s not appreciated by the market,” he published in the latest research note of his on the business.
Gutman believes the broader DIY list landscapes will typically gain from the anticipated rise in demand. To be 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 additionally raised his price target for Home Depot inventory, nevertheless, not as significantly. It’s these days $300, out of the former $295. The brand new level is actually 14 % above Home Depot’s most recent closing stock price.
Neither business enterprise 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 nearly 1.6 %.
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