TECD to Benefit From Rising End User Demand

Analysts at FTN Equity Capital Markets Corp maintain their “neutral” rating on Tech Data (NYSE: TECD), while raising their estimates for the company.

TECD posted its Q3 revenues and EPS at $5.64 billion and $0.84, respectively, easily beating the estimates and the consensus, FTN Equity Capital Markets said. The gross and operating margins at TECD were also higher than the estimates, FTN Equity Capital Markets added. The results at Tech Data were characterized by operating margin expansion in both Europe and Americas.

While maintaining silence over the earnings projections, TECD guided its revenue growth for 4Q10 to an increase of low-to-mid single digit year-over-year. FTN Equity Capital Markets believes that TECD will benefit going forward from the rising end user demand, given its position in the North American and European markets.

FTN Equity Capital Markets has raised its EPS estimates for FY10 and FY11 from $2.86 to $3.10 and from $3.20 to $3.40, respectively.