Brean Murray Carret & Co. Cuts Price Target on SYNNEX Corp. (SNX) as Pressure Weighs on Operating Margin
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Up: 8 | Down: 5 | New: 26
Rating Summary:
15 Buy, 3 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Brean Murray Carret & Co. is reiterating its Buy rating on shares of SYNNEX Corp. (NYSE: SNX), but is lowering its price target from $43 to $40 due to the incremental investment pressures on near-term operating margins.
The company reported strong quarterly earnings with $2.49 billion in revenue and EPS of $0.85, mixed with the Street's estimates of $2.51 billion and $0.80.
SNX released its August quarterly guidance with a revenue range of $2.54-$2.64 billion and EPS range of $0.88-$0.92, below the Streets current estimates of $2.65 billion and $0.94. The firm reports that the weakness is due to ongoing soft consumer IT demand, but notes that it is most likely priced into the stocks price already.
SYNNEX Corp. is facing a lot of near-term pressure on its operating margin due to really weak demand from the Japanese market and investments in the GBS businesses over the next few quarters.
The firm reports that it sees limited upside potential due to the pressure that operating margins are and will be facing over the near-term. Brean Murray believes that long-term gross margin should range between 5.6 and 5.7 percent.
Brean Murray cut its Q3 and FY11 EPS estimates from $1.03 and $3.88 to $0.90 and $3.65. The firms current FY11 revenue estimate is $10.44 billion.
For more ratings news on SYNNEX Corp. click here and for the rating history of SYNNEX Corp. click here.
Shares of SYNNEX Corp. closed at $31.46 yesterday.
The company reported strong quarterly earnings with $2.49 billion in revenue and EPS of $0.85, mixed with the Street's estimates of $2.51 billion and $0.80.
SNX released its August quarterly guidance with a revenue range of $2.54-$2.64 billion and EPS range of $0.88-$0.92, below the Streets current estimates of $2.65 billion and $0.94. The firm reports that the weakness is due to ongoing soft consumer IT demand, but notes that it is most likely priced into the stocks price already.
SYNNEX Corp. is facing a lot of near-term pressure on its operating margin due to really weak demand from the Japanese market and investments in the GBS businesses over the next few quarters.
The firm reports that it sees limited upside potential due to the pressure that operating margins are and will be facing over the near-term. Brean Murray believes that long-term gross margin should range between 5.6 and 5.7 percent.
Brean Murray cut its Q3 and FY11 EPS estimates from $1.03 and $3.88 to $0.90 and $3.65. The firms current FY11 revenue estimate is $10.44 billion.
For more ratings news on SYNNEX Corp. click here and for the rating history of SYNNEX Corp. click here.
Shares of SYNNEX Corp. closed at $31.46 yesterday.
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