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 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 new objective is approximately forty % higher than Lowe’s most recent closing stock price.
Gutman made his revision on the notion that the present average analyst earnings projections for the business enterprise underestimate a critical factor: demand for home improvement goods as well as services. The prognosticator feels it’s realistic that Lowe’s will hit its goal of a twelve % EBIT (earnings before interest as well as 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 had written in the newest research note of his on the business.
Gutman feels the broader DIY retail landscape will generally gain from the anticipated rise in 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 thirteen % for Lowe’s and six % for Home Depot.
The Morgan Stanley analyst in addition has raised the price target of his for Home Depot stock, though not as dramatically. It is now $300, out of the former $295. The new level is actually 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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