Lowe’s Stock Could Blast forty % Higher, As reported by 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 do retailer, upping it to $210 per share from the previous $190 while maintaining his obese (read: buy) recommendation.
The new target is exactly 40 % higher than Lowe’s most recent closing stock price.
Gutman made his modification on the notion that the current average analyst earnings projections for the business enterprise underestimate a crucial factor: demand for home improvement goods and services. The prognosticator feels it is realistic that Lowe’s will hit the target of its of a twelve % EBIT (earnings before interest and taxes) margin in 2021.
“Indeed, we feel [Lowe’s] will nearly reach it in 2020 on a’ normalized’ [profit and loss]. This’s not appreciated by the market,” he had written in his latest research note on the company.
Gutman feels the broader DIY retail landscape will typically reap some benefits from the anticipated rise 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 13 % for Lowe’s and six % for Home Depot.
The Morgan Stanley analyst has also raised the price target of his for Home Depot stock, nonetheless, not as dramatically. It’s currently $300, from the former $295. The brand new level is 14 % above Home Depot’s most recent closing stock price.
Neither business enterprise 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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