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 home improvement retailer, upping it to $210 per share from the prior $190 while keeping his obese (read: buy) recommendation.

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

Gutman made his modification on the belief that the current average analyst earnings projections for the company underestimate a critical factor: demand for home improvement goods as well as services. The prognosticator feels it is reasonable that Lowe’s will hit its goal of a twelve % EBIT (earnings before interest as well as taxes) margin in 2021.

“Indeed, we feel [Lowe’s] will nearly reach it in 2020 on a’ normalized’ [profit as well as loss]. This is not appreciated by the market,” he have written in the newest research note of his on the company.

Gutman believes the broader DIY list landscapes will generally benefit from the anticipated increase 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 6 % for Home Depot.

The Morgan Stanley analyst has also raised the price target of his for Home Depot inventory, however, not as significantly. It is currently $300, out of the former $295. The new level is fourteen % above Home Depot’s most recent closing stock price.

Neither business enterprise 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 almost 1.6 %.

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