Lowe’s Stock Could Blast 40 % Higher, According to Analyst
A prominent Lowe’s (NYSE:LOW) bull is 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 earlier $190 while maintaining his overweight (read: buy) recommendation.
The brand new goal is roughly 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 enterprise underestimate a critical factor: need for home improvement goods and services. The prognosticator feels it’s practical that Lowe’s is going to hit its goal of a twelve % EBIT (earnings before interest and taxes) margin in 2021.
“Indeed, we think [Lowe’s] will almost reach it in 2020 on a’ normalized’ [profit as well as loss]. This’s not appreciated by the market,” he published in the latest research note of his on the company.
Gutman feels the broader DIY list landscape will generally benefit from the anticipated increasing amount of 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 thirteen % for Lowe’s and six % for Home Depot.
The Morgan Stanley analyst in addition has raised his price target for Home Depot stock, though not as drastically. It’s currently $300, out of the former $295. The new level is actually 14 % 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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