UPDATE: Lowe's (LOW) PT Raised to $260 at Morgan Stanley on Higher Buybacks
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Morgan Stanley analyst Simeon Gutman raised the price target on Lowe's (NYSE: LOW) to $260.00 (from $255.00) on the expectation for higher share buybacks going forward.
The analyst reiterated an Overweight rating, stating "We also raise our PT from $255 to $260 on higher '23e EPS. For '21, we model comps +6%, gross margin expansion of ~7 bps and SG&A leverage of ~160 bps. This produces an EBIT margin of 12.5% and EPS of $11.80 in '21. For '22, we model comps +1%, gross margins flat and ~10 bps of SG&A leverage. This results an EBIT margin of 12.6% and along with $10b in share buybacks, produces EPS of $12.65. For '23, we model comps of +1%, gross margin flat and SG&A leverage of ~20 bps. This produces an EBIT margin of ~12.8% and combined with $10b in buybacks results in EPS of $13.80. ~19x our updated '23e EPS, results in our new PT of $260."
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