On Feb 11, Zacks Investment Research upgraded
Lexmark International Inc.
) to a Zacks Rank #1 (Strong Buy). The upgrade came on the back
of positive estimate revisions over the last 30 days. Lexmark's
shares have given an outstanding one-year return of 72.7%. The
company also delivered positive earnings surprises in the last
four quarters with an average beat of 5.45%.
Why the Upgrade?
Over the last 30 days, Lexmark witnessed one upward as well as
a downward revision for the current quarter. The Zacks Consensus
Estimate increased a couple of cents to 85 cents over the same
period of time.
Lexmark also witnessed four positive estimate revisions in the
last 30 days which prompted a 22 cents increase in earnings
estimates for the fiscal 2014 which is now pegged at $3.90 per
It is also worth noting that the Zacks Consensus Estimate for
Lexmark's first quarter and fiscal 2014 earnings are within
management's guided range. Lexmark expects its first-quarter
earnings (non-GAAP) guidance range of 80-90 cents. Non-GAAP
earnings for fiscal 2014 are expected in the range of $3.80-$4.00
Some of the buoyancy surrounding the shares is related to the
company's growth across all its business segments and improved
Imaging Solutions and Services (ISS) performance in the last
reported quarter. We see favorable growth prospects for Lexmark
in the software sector and it is also trying to innovate with new
Despite an overall tepid outlook for the printing industry,
Lexmark is doing really well in the Managed Printing Services
(MPS) market and is winning deals continuously. We consider the
Inkjet exit to be a positive as Lexmark will now be able to focus
more on MPS and the software business where growth prospects are
Moreover, the company's restructuring and share buyback plans
could boost share price in the near term. These factors
culminated in the Zacks Rank upgrade on Lexmark shares.
Other Stocks to Consider
Besides Lexmark, other stocks worth considering are
). While Quantum Corp sports a Zacks Rank #1 (Strong Buy),
Juniper and Accenture carry a Zacks Rank #2 (Buy).
ACCENTURE PLC (ACN): Free Stock Analysis
JUNIPER NETWRKS (JNPR): Free Stock Analysis
LEXMARK INTL (LXK): Free Stock Analysis
QUANTUM CP-DSSG (QTM): Free Stock Analysis
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