Brean Capital Raises Price Target on Tech Data (TECD) Following 1Q Results
Brean Capital maintains a Buy rating on Tech Data (NASDAQ: TECD), and raised the price target to $71.00 (from $63.00), 1Q16 results. TECD reported revenue of $5.6B, in-line with Street estimates. EPS beat estimates with $0.80 compared to Street's $0.71.
Analyst Ananda Baruah commented, "Maintain Buy despite peak-ish valuation at 12x – 13x P/E as European revenue (60% of revs) is turning faster than anticipated. N-T valuation would remain our caveat, while strategically L-T we remain positive, increasing exposure to higher growth and higher margin opportunities and increasingly healthy ROIC (now at 11% vs. WACC of 9%). ‘15 tailwinds could include 1) Windows Server 2003 refresh cycle, 2) growing integrated supply chain services, 3) increasing exposure to data center and Cloud, and 4) tablet product cycles. Our $71 TP is 12x the ~$5.67 in EPS we believe TECD can generate in FY17 (CY16), ex the $4.50 in net cash."
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Shares of Tech Data closed at $64.49 yesterday.