Raymond James Raises Price Target on CDW (CDW) Following 2Q EPS Beat

Raymond James reiterated an Outperform rating on CDW Corporation (NASDAQ: CDW) and raised the price target to $44.00 (from $42.00), following 2Q15 results. Revenue of $3.3 billion came in ahead of consensus' $3.24 billion. Non-GAAP EPS was reported at $0.80 beat $0.70 consensus.

Analyst Brian Alexander commented, "We maintain our Outperform rating and favorable view on CDW following strong 2Q15 results in light of a muted IT spending environment. Growth rebounded amid skepticism of domestic spending trends and cloud cannibalization. Management announced the acquisition of the remaining 65% interest in Kelway, and subsequently raised its 2H15 revenue guidance by 550 basis points (bps), and 2H15 EPS by $0.07. This implies a pre-tax margin of 5.5%, which is relatively in line with CDW’s (~6%), despite Kelway’s seasonally softer back half of the calendar year. Moreover, management now expects to exceed its 2016 EPS goal of low-double-digit growth, and capital allocation should favor dividend growth and share repurchases for a while. We raise our 2015 and 2016 non-GAAP EPS estimates to $2.89/3.18 from $2.72/3.00. Our price target of $44 is based on ~14x our 2016 EPS estimate and ~9x EV/EBITDA, in line with recent ranges and closer to market multiples due to its attractive growth and return on capital profile."

For an analyst ratings summary and ratings history on CDW Corporation click here. For more ratings news on CDW Corporation click here.

Shares of CDW Corporation closed at $38.63 yesterday.

You May Also Be Interested In

• Citi Upgrades United Microelectronics Corp (2303:TT) (UMC) to Buy 'with limited downside'
• Summit Insights Downgrades Silicon Labs (SLAB) to Hold, 'expect its stock to be an inline performer'
• KKR Real Estate Financial Trust (KREF) PT Lowered to $12 at JMP Securities