Lehman Upgrades Tech Data to 'Equal-Weight'
Lehman Brothers upgraded Tech Data (TECD ) to equal-weight from underweight.
Analyst Jon Horvath says information-technology demand remains soft but he thinks the underpinnings of a U.S.-led recovery in IT spending are solid. He believes market share losses to other broadline competitors -- the reason for his initiation of coverage with an underperform rating -- has stabilized. He says downward pressure to his conservative estimates leading up to earnings on May 28 is largely priced into expectations.
Horvath notes Tech Data did not participate in a recent run-up in tech stocks, and he thinks valuation can go higher. He sees 37 cents first-quarter earnings per share, and $1.65 fiscal 2004 (Jan.), and $1.90 fiscal 2005. He raised his target to $27.