Stifel analyst, Matthew Sheerin, reiterated his Buy rating on shares of Tech Data (NASDAQ: TECD) and raised his price target to $105 after the company reported EPS of $4.55 which beat Consensus of $4.06. However, guidance for Q1 was modestly below Consensus due to modestly slower growth in Europe, y/y FX headwinds, and a "portfolio optimization" program. The company defines portfolio optimization as willingness to walk away from unprofitable vendor lines or customers. This is likely to put pressure on top-line growth but sustain margins.

The analyst stated "TECD announced its plans to selective reevaluate and deselect from its product portfolio, particularly involving its endpoint device business. While this action is expected to moderate top-line growth, the higher value product mix is expected to be materially margin accretive, thus contributing to management’s target of a ~10% y/y EPS growth for FY20". The new PT of $105 is up from $100.

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Shares of Tech Data closed at $93.67 yesterday.