Lowe’s Stock Could Blast forty % Higher, Based on Analyst
A prominent Lowe’s (NYSE:LOW) bull is 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 preceding $190 while maintaining his overweight (read: buy) recommendation.
The brand new objective is exactly 40 % higher compared to Lowe’s most recent closing stock price.
Gutman made the modification of his on the belief that the present average analyst earnings projections for the business enterprise underestimate an important factor: demand for home improvement goods as well as services. The prognosticator feels it’s reasonable 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 believe [Lowe’s] will almost reach it in 2020 on a’ normalized’ [profit and loss]. This’s not appreciated by the market,” he have written in the newest research note of his on the business.
Gutman believes the broader DIY list landscapes will typically benefit 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 6 % for Home Depot.
The Morgan Stanley analyst has additionally raised his price target for Home Depot stock, even thought not as drastically. It’s currently $300, out of the former $295. The brand new level is actually fourteen % 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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