UPDATE: Citi Upgrades Synnex
In a report published Wednesday, Citi analyst Jim Suva upgrades Synnex (NYSE: SNX) to Buy from Neutral, raises target price to $72.00 from $64.00.
According to the report, the upgrade represents ~22 percent upside. The analyst's target price is based on a P/E of 11x (unchanged) but their EPS moves higher based on the accretion from the pending acquisition of IBM's CRM business which has a 10 percent EBITDA margin, well above SNX's current 2.5 percent.
“Synnex shares traded down 10% post earnings on January 9 based on concerns of margin pressure, which presents a compelling opportunity given the major transformation we see on the horizon,” the report noted. “The transformation is based on the pending acquisition of IBM's CRM business which is substantial in size ($1.2B revs, ~10% accretive to Synnex top-line) and propels the company to become a serious contender within the BPO landscape.”
SNX closed Tuesday at $61.18 with shares trading up at 2.91 percent.
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