Lowe’s Stock Could Blast 40 % Higher, According to Analyst

Lowe’s Stock Could Blast forty % 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 do retailer, upping it to $210 per share from the earlier $190 while maintaining his obese (read: buy) recommendation.

The brand new target is approximately forty % higher compared to Lowe’s most recent closing stock price.

Gutman made the modification of his on the perception that the present typical analyst earnings projections for the company underestimate a critical factor: demand for home improvement goods and services. The prognosticator feels it is reasonable that Lowe’s is going to hit the goal of its of a 12 % 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 is not valued by the market,” he wrote in his latest research note on the company.

Gutman feels the broader DIY retail landscapes will generally reap some benefits from the anticipated increase 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 in addition has raised the price target of his for Home Depot stock, even thought not as significantly. It’s currently $300, out of the former $295. The brand new level is 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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