Lowe’s Stock Could Blast 40 % 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 his price target on the do retailer, upping it to $210 per share from the preceding $190 while keeping his overweight (read: buy) recommendation.
The new objective is approximately forty % higher than Lowe’s most recent closing stock price.
Gutman made his modification on the belief that the present average analyst earnings projections for the company underestimate a critical factor: demand for home improvement goods and services. The prognosticator feels it’s practical that Lowe’s will hit its goal of a 12 % EBIT (earnings before interest and taxes) margin in 2021.
“Indeed, we think [Lowe’s] will almost reach it in 2020 on a’ normalized’ [profit and loss]. This is not valued by the market,” he wrote in his latest research note on the business.
Gutman feels the broader DIY retail landscape will typically benefit from the anticipated rise in demand. To be 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 additionally raised the price target of his for Home Depot stock, although not as drastically. It is currently $300, from the former $295. The new level is 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 nearly 1.6 %.
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