Lowe’s Stock Could Blast 40 % Higher, As reported by 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 his price target on the do retailer, upping it to $210 per share from the prior $190 while maintaining his obese (read: buy) recommendation.
The new objective is roughly 40 % higher than Lowe’s most recent closing stock price.
Gutman made the modification of his on the notion that the present typical analyst earnings projections for the business enterprise underestimate an important factor: need for home improvement goods and 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 almost 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 feels the broader DIY list landscapes 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 six % for Home Depot.
The Morgan Stanley analyst has also raised the price target of his for Home Depot inventory, even thought not as dramatically. It’s currently $300, out of the former $295. The brand new level is actually fourteen % above Home Depot’s most recent closing stock price.
Neither company 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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