Lowe’s Stock Could Blast forty % 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 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 approximately forty % higher compared to Lowe’s most recent closing stock price.
Gutman made his modification on the notion that the current typical analyst earnings projections for the business enterprise underestimate a crucial factor: need for home improvement goods and services. The prognosticator feels it’s reasonable that Lowe’s is going to hit the target of its of a twelve % EBIT (earnings before interest and taxes) margin in 2021.
“Indeed, we believe [Lowe’s] will nearly reach it in 2020 on a’ normalized’ [profit as well as loss]. This’s not valued by the market,” he had written in his latest research note on the company.
Gutman thinks the broader DIY list landscapes will typically gain from the anticipated rise 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 his price target for Home Depot inventory, although not as dramatically. It’s now $300, from the former $295. The new level is 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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