Lowe’s Stock Could Blast forty % 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 home improvement retailer, upping it to $210 per share from the previous $190 while maintaining his obese (read: buy) recommendation.
The new objective is exactly forty % higher than Lowe’s most recent closing stock price.
Gutman made the modification of his on the perception that the current average analyst earnings projections for the company underestimate a critical factor: demand for home improvement goods as well as services. The prognosticator feels it’s reasonable that Lowe’s is going to hit the goal of its of a 12 % EBIT (earnings before interest and taxes) margin in 2021.
“Indeed, we feel [Lowe’s] will nearly reach it in 2020 on a’ normalized’ [profit and loss]. This is not valued by the market,” he had written in his newest research note on the company.
Gutman thinks the broader DIY list landscapes will typically gain from the anticipated increasing amount of 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 thirteen % for Lowe’s and six % for Home Depot.
The Morgan Stanley analyst has additionally raised the price target of his for Home Depot stock, although not as drastically. It’s now $300, from the former $295. The new level is fourteen % above Home Depot’s most recent closing stock price.
Neither business enterprise 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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