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

The brand new target is exactly 40 % higher compared to Lowe’s most recent closing stock price.

Gutman made his revision on the notion that the present typical analyst earnings projections for the company underestimate an important factor: need for home improvement goods as well as services. The prognosticator feels it is realistic that Lowe’s will hit its target 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 appreciated by the market,” he had written in the latest research note of his on the business.

Gutman thinks the broader DIY retail landscape will generally reap some benefits from the anticipated increasing amount of 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 6 % for Home Depot.

The Morgan Stanley analyst has additionally raised his price target for Home Depot inventory, however, not as dramatically. It’s currently $300, out of the former $295. The brand new level is actually 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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Investing legend and FintechZoom Co-founder Pedro Vaz just revealed what he thinks are actually the ten best stocks for investors to buy right now… and Lowe’s Companies, Inc. was not one of them.

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