UBS Starts Kemet (KEM) at Neutral; Restructuring Yields Benefits but Normalized Model Unclear
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Price: $4.44 +0.23%
Rating Summary:
2 Buy, 3 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
Rating Summary:
2 Buy, 3 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
Trade KEM Now!
UBS initiates coverage on Kemet (NYSE: KEM) with a Neutral. PT $16.
UBS analyst says, "KEM is a manufacturer of capacitors and operates in three major segments – Tantalum, Ceramic, and Film and Electrolytic (F&E), with forecast FY11 (ending March 2011) sales of $1billion (up 36% Y/Y). Key end-markets include Auto, Telecom, Computing, and Indus trial/Lighting, with Bosch, Cisco (Nasdaq: CSCO), Continental, Dell (Nasdaq: DELL), HP (NYSE: HPQ), Motorola (NYSE: MOT), and Nokia (NYSE: NOK) among the leading OEM customers. With broad-based exposure, we foresee revenues growing at rates in line with industry CAGR of 5%."
"Our FY12 EPS estimate is $1.98, below the Street estimate of $2.26, primarily because we foresee the restocking tailwinds that benefited FY10 mitigating. However, at 7x EPS on our estimate, we believe the stock is already discounting downside risks. Further, any supply chain disruption from Japan could allow KEM to fulfill near-term demand."
For more ratings news on Kemet click here and for the rating history of Kemet click here.
Shares of Kemet closed at $15.04 yesterday, with a 52 week range of $2.06-$17.05.
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UBS analyst says, "KEM is a manufacturer of capacitors and operates in three major segments – Tantalum, Ceramic, and Film and Electrolytic (F&E), with forecast FY11 (ending March 2011) sales of $1billion (up 36% Y/Y). Key end-markets include Auto, Telecom, Computing, and Indus trial/Lighting, with Bosch, Cisco (Nasdaq: CSCO), Continental, Dell (Nasdaq: DELL), HP (NYSE: HPQ), Motorola (NYSE: MOT), and Nokia (NYSE: NOK) among the leading OEM customers. With broad-based exposure, we foresee revenues growing at rates in line with industry CAGR of 5%."
"Our FY12 EPS estimate is $1.98, below the Street estimate of $2.26, primarily because we foresee the restocking tailwinds that benefited FY10 mitigating. However, at 7x EPS on our estimate, we believe the stock is already discounting downside risks. Further, any supply chain disruption from Japan could allow KEM to fulfill near-term demand."
For more ratings news on Kemet click here and for the rating history of Kemet click here.
Shares of Kemet closed at $15.04 yesterday, with a 52 week range of $2.06-$17.05.
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