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 his price target on the home improvement retailer, upping it to $210 per share from the preceding $190 while keeping his overweight (read: buy) recommendation.
The brand new objective is around 40 % higher than Lowe’s most recent closing stock price.
Gutman made the revision of his on the perception that the present average analyst earnings projections for the company underestimate a crucial factor: demand for home improvement goods as well as services. The prognosticator feels it is practical that Lowe’s is going to hit the target of its of a 12 % EBIT (earnings before interest as well as taxes) margin in 2021.
“Indeed, we think [Lowe’s] will almost reach it in 2020 on a’ normalized’ [profit and loss]. This is not appreciated by the market,” he have written in his latest research note on the company.
Gutman thinks the broader DIY retail landscape will generally reap some benefits from the anticipated increase in demand. Being 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 13 % for Lowe’s and 6 % for Home Depot.
The Morgan Stanley analyst has additionally raised his price target for Home Depot stock, however, not as considerably. It is currently $300, from the former $295. The new level is actually 14 % above Home Depot’s most recent closing stock price.
Neither company 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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