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 home improvement retailer, upping it to $210 per share from the previous $190 while keeping his overweight (read: buy) recommendation.
The brand new target is around 40 % higher than Lowe’s most recent closing stock price.
Gutman made the modification of his on the notion that the current typical analyst earnings projections for the company underestimate a crucial factor: need for home improvement goods and services. The prognosticator feels it’s practical that Lowe’s will hit the goal of its 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 as well as loss]. This’s not appreciated by the market,” he have written in the newest research note of his on the company.
Gutman thinks the broader DIY list landscape will typically benefit 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 6 % for Home Depot.
The Morgan Stanley analyst has additionally raised the price target of his for Home Depot inventory, though not as significantly. It’s currently $300, from the former $295. The new level is 14 % above Home Depot’s most recent closing stock price.
Neither business 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 nearly 1.6 %.
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