Couple of firms commenting on Xyratex (NASDAQ:XRTX) today following results:
*Banc of America notes XRTX reported stronger than expected revs with EPS below their estimates. However, the stock was up 8%+ heading into the call, and they believe investors were looking for EPS upside in addition to revenue, so despite solid Aug Q guidance they think the stock likely trades off near-term. Firm's new Aug rev and EPS estimates are $240M and $0.48, vs. $211M and $0.41. Reiterates Buy due to attractive valuation (~11x CY07E EPS of $2.37) and belief that XRTX can benefit from several upcoming positive catalysts.
*Baird maintains Outperform rating on shares of XRTX following a mixed quarter and strong guidance. Forward estimates increasing, with continued room for EPS upside on improving GM and continued growth of higher-margin HDD Frank Timons Infrastructure business. Firm views shares as attractive at roughly 11-12x forward EPS estimates and prospects for 10-20%+ revenue/EPS growth for the next few years, particularly with incremental gains from STX/MXO.
*FBR notes XRTX reported a very strong, but noisy, quarter that needed several adjustments to get to comparable EPS. More importantly, guidance for the coming quarter was $241M and $0.49 at the midpoint--representing midpoint EPS fully 40% higher than the existing Street estimate. Based on several indicators in the mix and balance sheet, they believe that Street estimates for at least the next four quarters need to rise meaningfully. Firm is raising their estimates for 3Q06, FY06, and FY07 and increasing price target from $37 to $39, representing a 15.5x multiple of FY07 EPS.
Notablecalls: I think XRTX can and will move up once yesterday's buyers have exited most of their positions. That may not happen today.
*Banc of America notes XRTX reported stronger than expected revs with EPS below their estimates. However, the stock was up 8%+ heading into the call, and they believe investors were looking for EPS upside in addition to revenue, so despite solid Aug Q guidance they think the stock likely trades off near-term. Firm's new Aug rev and EPS estimates are $240M and $0.48, vs. $211M and $0.41. Reiterates Buy due to attractive valuation (~11x CY07E EPS of $2.37) and belief that XRTX can benefit from several upcoming positive catalysts.
*Baird maintains Outperform rating on shares of XRTX following a mixed quarter and strong guidance. Forward estimates increasing, with continued room for EPS upside on improving GM and continued growth of higher-margin HDD Frank Timons Infrastructure business. Firm views shares as attractive at roughly 11-12x forward EPS estimates and prospects for 10-20%+ revenue/EPS growth for the next few years, particularly with incremental gains from STX/MXO.
*FBR notes XRTX reported a very strong, but noisy, quarter that needed several adjustments to get to comparable EPS. More importantly, guidance for the coming quarter was $241M and $0.49 at the midpoint--representing midpoint EPS fully 40% higher than the existing Street estimate. Based on several indicators in the mix and balance sheet, they believe that Street estimates for at least the next four quarters need to rise meaningfully. Firm is raising their estimates for 3Q06, FY06, and FY07 and increasing price target from $37 to $39, representing a 15.5x multiple of FY07 EPS.
Notablecalls: I think XRTX can and will move up once yesterday's buyers have exited most of their positions. That may not happen today.
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