In a report published Tuesday, JMP Securities analyst Greg McDowell reiterated a Market Outperform rating on Teradata Corporation TDC, but lowered the price target from $77.00 to $63.00.
In the report, JMP Securities noted, “We maintain our Market Outperform rating on Teradata Corporation and lower our price target from $77 to $63 after the company negatively pre-announced 3Q results and lowered full-year EPS and revenue guidance. Performance in the Americas and Europe seemed roughly in line at 7% and 11% growth, respectively, but performance in Asia-Pacific/Japan and Middle East/Africa was disappointing with revenue down 10% and 12%, respectively. Consequently, Teradata posted preliminary 3Q revenue of $665 million, versus consensus of $699 million, and posted preliminary non-GAAP EPS of $0.69-$0.70, versus consensus of $0.81, and lowered full-year guidance considerably. The stock was down 12% in the aftermarket. While the three straight quarters of negative product growth are frustrating for investors, and the stock has seen a double-whammy of multiple contraction and lowered estimates, we still think Teradata will play a critical role in the huge data architecture transformation taking place and think the stock may find a bottom in the low 40s, which would imply a PE multiple of around 12x-13x against our 2015 estimates. We lower our 2013 non-GAAP EPS from $3.05 to $2.75 (versus consensus of $3.04), lower our 2014 non-GAAP EPS estimate from $3.55 to $3.26 (versus consensus of $3.46), and lower our 2015 non-GAAP EPS estimate from $3.98 to $3.69, versus consensus of $3.89. Our new $63 price target is based on the same 2014 PE multiple we were using before, 19x, applied to our lower 2014 EPS estimate.”
Teradata Corporation closed on Monday at $53.58.
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