J.P. Morgan Neutral on D&B

J.P. Morgan Chase & Co. is out with a research report on D&B DNB and it has a Neutral rating and a $73 price target on shares. In a note to clients, J.P. Morgan Chase & Co. writes, "We're maintaining our Neutral rating on DNB following Q3,11 results. Revenues rose 2-3% (ex forex and M&A) while profits lifted 15% (v. JPM's +14% estimate). EPS of $1.23 (incl. ~$0.19 Tech investment) compared with JPM's $1.29, but Tech costs were $0.14 higher than our model. North America revs. grew 2%—an improvement from flat in Q2,11. International increased ~4% organic as pickup in Europe (+5% ex currency) offset ongoing drag from Japan (~20% of D&B's International revs.). 2011 guidance was reiterated—revs. +5-8% (2-5% organic) with EPS +6-10% (or $6.00-6.25 before >$0.40 of Tech costs). D&B announced a new $500MM share repurchase authorization—while the plan is optically large (~15% of D&B's market cap.), we don't expect the company to deviate much from its previously-stated target of ~$100MM per annum. We think Friday's 8:00AM ET call will likely focus on US rev. trends, (esp. at Risk segment) new products, the Tech Project, and buyback plans. DNB shares are -20% YTD,11 and valuation is intriguing at 10.2 times 2012E EPS. We think the stock could react well to this report, and investors will likely be pleased with the buyback." Shares of DNB gained $65.81 yesterday.