JP Morgan Ups Opinion on Kronos

Analyst Paul Coster cites factors such as the company's sales and stock price

JP Morgan raised its investment recommendation on Kronos (KRON ) to overweight from neutral.

Analyst Paul Coster also raised his 56 cents fourth quarter earnings per share estimate to 59 cents, and his $148.1 million revenue estimate to $148.9 million, which puts him at the top end of the company's fourth quarter guidance and 2 cents above the consensus. He cited three reasons: 1) The ASIS ASIS International conference in Orlando, Florida last week revealed strong interest in KRON 4500 for access control; 2) the company's fourth quarter quarter over quarter gm improvement averages 210 basis points over the last eight years, and is replicable assuming a strong year-end; 3) the company's acquisition of CTR dealership should add $10 million in sales, and be 2 cents accretive in fiscal year 2006 (ending September). The analyst upgraded the stock as its shares trade at a 17% discount to its mean 2-year next twelve months p-e. The analyst sees $1.87 fiscal year 2006 earnings per share (ending September.)

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