Imperial Capital Raises Price Target on Zebra Technologies (ZBRA) to $75; Reiterates Outperform
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Imperial Capital reiterated an Outperform rating on Zebra Technologies (NASDAQ: ZBRA), and raised the price target to $75.00 (from $65.00), after adjusting estimates. Imperial sees operating margin improving from 1.5% in FY15 to 3.7% in FY16 to 6.7% in FY17. 2016 EBITDA and EPS estimates are also increased.
Analyst Jeff Kessler commented, "Management is focused on enhancing its free cash flow profile and paying down the Motorola Enterprise acquisition debt to help improve its capital structure. We believe the company is on track to pay down $300mn of debt in FY16 and it is confident that it can increase its debt repayment to $350mn during FY17. Although this would improve the company's net debt to EBITDA leverage, we do not believe that management would be able to achieve its previously stated leverage ratio of 3x by the end of FY17. We believe the challenging macro-environment makes this goal even more difficult. We think the company needs to manage its expenses tightly and steadily improve its EBITDA if it intends to achieve net debt to EBITDA leverage of 3.0x or below by the end of FY18."
Shares of Zebra Technologies closed at $68.72 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change
Related EntitiesDefinitive Agreement, Imperial Capital
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