Lowe’s stock could rise 40%, analyst says
An eminent Lowe’s (NYSE: LOW) Bull is pushing harder on the company’s shares. Morgan Stanley analyst Simeon Gutman on Friday raised his price target on the home improvement retailer to $ 210 per share from $ 190 previously, while maintaining his overweight recommendation (read: buy).
The new target is exactly 40% higher than Lowe’s most recent close price.
Gutman made his review on the assumption that analysts’ current average earnings projections for the company underestimate a critical factor: demand for home improvement goods and services. The prognosticator believes it is realistic that Lowe’s will meet its target of an EBIT (earnings before interest and tax) margin of 12% in 2021.
“Indeed, we believe [Lowe’s] will almost reach it in 2020 on a “normalized” [profit and loss]. It is not appreciated by the market, ”he wrote in his latest research note on the company.
Gutman believes the larger DIY retail landscape will generally benefit from the expected surge in demand. As a result, his earnings per share estimates for Lowe’s and his big rival Home deposit (NYSE: HD) are notably above the average of the prognosticators following these actions – of 13% for Lowe’s and 6% for Home Depot.
The Morgan Stanley analyst also raised his price target for Home Depot stock, but not so dramatically. It is now $ 300, down from $ 295 previously. The new level is 14% above Home Depot’s most recent closing price.
Neither company had a memorable day in the market on Friday. Lowe’s stock fell 1.3%, against the 0.9% gain in the S&P 500 index. Home Depot was down nearly 1.6%.
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