RBC Capital Raises Price Target on CDW (CDW) to $48 Following 2Q Beat
RBC Capital reiterated an Outperform rating on CDW Corporation (NASDAQ: CDW), and raised the price target to $48.00 (from $46.00), following the company's 2Q earnings report. CDW reported revenue of $3.66B and EPS of $0.93, both above Street expectations of $3.65B and $0.84.
Analyst Amit Daryanani commented, "Despite concerns around Brexit and the macro environment, CDW reported material upside to Jun-qtr EPS with results of $3.66B/$0.93 vs. consensus ($3.65B/$0.84) and appropriately tempered H2:16 outlook to reflect an incrementally worse f/x impact. Impressively in June-qtr we saw healthy upside on the public vertical (corporate was modestly soft) and Brexit had no real impact to fundamentals. EBITDA margins remained >8% driven by better mix and strong execution. We remain positive on CDW's CY16 and long-term prospects and continue to see potential upside from: 1) Better than expected Dell ramps: CDW estimates ~150bps (~$200M) of growth in CY16, 2) Share buybacks could contribute $0.01-0.03 to Y16 EPS, 3) ability to shift to higher growth product/channels to offset macro weakness and 4) cross selling opportunities should boost revenues long-term. Maintain OP rating and raising target to $48."
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Shares of CDW Corporation closed at $42.63 yesterday.