Lowe’s Stock Could Blast 40 % Higher, According to 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 his price target on the home improvement retailer, upping it to $210 per share from the earlier $190 while maintaining his obese (read: buy) recommendation.
The brand new goal is exactly forty % higher than Lowe’s most recent closing stock price.
Gutman made his modification on the perception that the current average analyst earnings projections for the business underestimate a critical factor: demand for home improvement goods and services. The prognosticator feels it’s practical that Lowe’s will hit its target 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 as well as loss]. This is not valued by the market,” he had written in the newest research note of his on the company.
Gutman thinks the broader DIY retail landscape will typically reap some benefits from the anticipated increase in demand. To be 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 has additionally raised the price target of his for Home Depot stock, nevertheless, not as significantly. It’s these days $300, from 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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