Mizuho Securities Remains Sidelined on Teradata Corp. (TDC) After Adjusting Estimates
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Mizuho Securities reiterated a Neutral rating and $28.00 price target on Teradata Corp. (NYSE: TDC). Mizuho believes that the company will have a hard time posting sustainable revenue growth for the next couple of years. In addition to rethinking its product, management will need to redesign its goto-market to appeal to business users in addition to IT, which could take time to yield results. Mizuho lowered revenue growth estimates for FY17 to -3% Y/Y vs. consensus of flat growth. EPS is now expected to be $2.12 (from $2.52) vs. consensus of $2.48.
Analyst Abhey Lamba commented, "Given significant change underway at TDC, we believe the company is unlikely to post sustainable revenue growth for the next couple of years. We are encouraged by recent product and go-to-market initiatives but they will likely result in significant pressure on n-t revenue growth and margins. We expect a transition to a more ratable model over time to result in reduction in n-t estimates. As such, we lower our estimates while maintaining our Neutral rating and $28 PT and see limited upside to valuation from current levels."
Shares of Teradata closed at $31.67 yesterday.
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