UPDATE: BMO Capital Markets Reiterates Market Perform Rating, Raises PT on Harte-Hanks
In a report published Friday, BMO Capital Markets reiterated its Market Perform rating on Harte-Hanks (NYSE: HHS), and raised its price target from $6.00 to $8.00.
BMO Capital Markets noted, “We believe yesterday's 28% move was driven by guidance for revenue growth at Direct Marketing this year, and to a lesser extent by ‘less bad' results at Shoppers. On the former, the unveiling of the TRUE Health + Wellness agency is intriguing, but Harte-Hanks isn't alone in repositioning to attack the healthcare space (MDCA is also getting aggressive in this area); we're more positive on the more visible revenue opportunity for Trillium software following Obama's reelection and greater certainty around financial regulation, though we prefer to play this trend through SAPE. Furthermore, the continued challenges in the technology vertical give caution, and we don't believe it is entirely related to European macro. On Shoppers, we recognize the brighter outlook post Florida sale and believe direct mail is underappreciated; however unlike Valassis's national platform, Harte-Hanks primarily appeals to smaller local businesses where the weak economy is most acute and free social/digital opportunities are increasingly appealing.”
Harte-Hanks closed on Thursday at $8.19.
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