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 do retailer, upping it to $210 per share from the prior $190 while keeping his obese (read: buy) recommendation.
The new target is exactly 40 % higher compared to Lowe’s most recent closing stock price.
Gutman made the modification of his on the perception that the present average analyst earnings projections for the company underestimate an important factor: demand for home improvement goods as well as services. The prognosticator feels it is reasonable that Lowe’s is going to hit its target of a twelve % EBIT (earnings before interest as well as taxes) margin in 2021.
“Indeed, we believe [Lowe’s] will almost reach it in 2020 on a’ normalized’ [profit and loss]. This is not valued by the market,” he published in the latest research note of his on the company.
Gutman thinks the broader DIY list landscapes will typically benefit from the anticipated increasing amount of demand. As 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 13 % for Lowe’s and 6 % for Home Depot.
The Morgan Stanley analyst in addition has raised his price target for Home Depot inventory, even thought not as significantly. It is currently $300, from the former $295. The brand new level is actually 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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