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 the price target of his on the home improvement retailer, upping it to $210 per share from the earlier $190 while maintaining his obese (read: buy) recommendation.
The new goal is exactly forty % higher compared to Lowe’s most recent closing stock price.
Gutman made the revision of his on the belief that the present average analyst earnings projections for the company underestimate an important factor: demand for home improvement goods and services. The prognosticator feels it is realistic that Lowe’s will hit its goal of a twelve % EBIT (earnings before interest and taxes) margin in 2021.
“Indeed, we feel [Lowe’s] will nearly reach it in 2020 on a’ normalized’ [profit as well as loss]. This is not appreciated by the market,” he had written in his newest research note on the company.
Gutman feels the broader DIY list landscapes will generally gain from the anticipated increasing amount of 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 in addition has raised the price target of his for Home Depot stock, nevertheless, not as significantly. It’s currently $300, out of 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 almost 1.6 %.
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