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 do retailer, upping it to $210 per share from the prior $190 while maintaining his overweight (read: buy) recommendation.
The new objective is roughly 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 business enterprise underestimate a crucial factor: demand for home improvement goods and services. The prognosticator feels it’s realistic that Lowe’s will hit the target of its of a twelve % EBIT (earnings before interest as well as taxes) margin in 2021.
“Indeed, we think [Lowe’s] will nearly reach it in 2020 on a’ normalized’ [profit and loss]. This is not valued by the market,” he wrote in the latest research note of his on the company.
Gutman thinks the broader DIY list landscapes will generally reap some benefits from the anticipated increase in 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 6 % for Home Depot.
The Morgan Stanley analyst in addition has raised his price target for Home Depot inventory, although not as considerably. It is now $300, out of the former $295. The brand new level is actually 14 % 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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