Large IT Distributor Downgraded
Analysts at Robert W Baird downgrade Tech Data Corporation (TECD) from “outperform” to “neutral,” while reducing their estimates for the company. The target price has been reduced from $50 to $42.
In a research note published this morning, the analysts mention that the company reported its 4QF05 results broadly ahead of expectations. The company has, however, guided to EPS of $0.57-$0.62 and revenues of $4.095-$5.100 billion for 1QF06, significantly short of the consensus expectations.
The analysts express their concern regarding the intensifying competition in the industry, in view of the sluggish demand. IT spending growth is likely to continue to be weak in the near future, Robert W Baird adds. The EPS estimate for 2006 has been reduced from $2.92 to $2.71.
Tech Data is a large global distributor of microcomputer hardware and software products to value-added resellers, corporate resellers, retailers, direct marketers and Internet resellers. Tech Data's stock was battered and is getting ready to be deep fried. losing over 6% today.
I find it interesting that the analysts in this case are concerned with weak IT spending growth and sluggish demand. Not so fast, Joe! The semiconductor analysts for Intel and National Semiconductor are claiming that demand for semiconductors are on the upswing and that now is a great time to buy semiconductor stocks. Computers are semiconductor based products and IT spending does have a direct effect of demand for such products. Albeit, it is a sub section of the market, but a major one, none the less. Ummm, do we have a disconnect here? You think so?
See: Tech Data Report
http://www.newratings.com/analyst_news/article_729479.html
In a research note published this morning, the analysts mention that the company reported its 4QF05 results broadly ahead of expectations. The company has, however, guided to EPS of $0.57-$0.62 and revenues of $4.095-$5.100 billion for 1QF06, significantly short of the consensus expectations.
The analysts express their concern regarding the intensifying competition in the industry, in view of the sluggish demand. IT spending growth is likely to continue to be weak in the near future, Robert W Baird adds. The EPS estimate for 2006 has been reduced from $2.92 to $2.71.
Tech Data is a large global distributor of microcomputer hardware and software products to value-added resellers, corporate resellers, retailers, direct marketers and Internet resellers. Tech Data's stock was battered and is getting ready to be deep fried. losing over 6% today.
I find it interesting that the analysts in this case are concerned with weak IT spending growth and sluggish demand. Not so fast, Joe! The semiconductor analysts for Intel and National Semiconductor are claiming that demand for semiconductors are on the upswing and that now is a great time to buy semiconductor stocks. Computers are semiconductor based products and IT spending does have a direct effect of demand for such products. Albeit, it is a sub section of the market, but a major one, none the less. Ummm, do we have a disconnect here? You think so?
See: Tech Data Report
http://www.newratings.com/analyst_news/article_729479.html
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