Sterne Agee Raises PT on Synnex to $32
Sterne Agee has published a research report on Synnex Corporation (NYSE: SNX) and has raised the price target on the company to $32 after the company reported strong November quarter EPS and guidance.
In the report, Sterne Agee writes, "SNX reported a strong November quarter with inline revenue at $2.8 billion and much higher than expected EPS at $1.37 vs. expectations of $1.14. This was due to gross margin coming in at 6.6% vs. expectations of 5.9% due to the company [benefiting] more than expected from favorable HDD pricing and a richer services mix (2% of revenue). While we believe in the strong fundamentals of SNX and see upside potential to $32 based on a 7.5x forward multiple, we find its valuation somewhat fully priced here trading at 8x CY12 EPS compared to many leading technology companies trading in the 8x-10x range. Moreover, we see potential downside risk should its higher gross margin levels prove unsustainable as HDD availability improves."
Sterne Agee maintains its Neutral rating on Synnex, which is currently trading up $2.07 from yesterday's $32.09 closing price.
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