Lowe’s Stock Could Blast 40 % 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 the price target of his on the home improvement retailer, upping it to $210 per share from the preceding $190 while keeping his obese (read: buy) recommendation.
The new target is roughly forty % higher than Lowe’s most recent closing stock price.
Gutman made the revision of his on the notion that the current average analyst earnings projections for the business underestimate an important factor: demand for home improvement goods as well as services. The prognosticator feels it is practical that Lowe’s is going to hit its goal of a 12 % 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’s not valued by the market,” he published in his newest research note on the company.
Gutman thinks the broader DIY list landscape will generally gain 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 thirteen % for Lowe’s and six % for Home Depot.
The Morgan Stanley analyst has also raised his price target for Home Depot stock, though not as significantly. It is currently $300, from the former $295. The brand new level is 14 % above Home Depot’s most recent closing stock price.
Neither business 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 nearly 1.6 %.
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