Comments from The Street Dot Com on 3/29/01
f you've ever signed the UPS guy's little computer notebook, then
you've touched one of Symbol Technologies' (SBL:NYSE -
news) many products. The company manufactures and sells
barcode scanners and portable computer devices that allow
people to manage data and inventory while wearing brown tube
socks in the middle of suburbia.
Unfortunately, with the current economic climate cooling, Lehman
Brothers analyst Jeff Kessler thinks the company's sales will fall,
simply because its customer base is facing such a tough time
meeting earnings growth targets. Kessler downgraded the
company to buy from strong buy, dropped his 2001 earnings
estimate to $1.25 from $1.32 a share and lowered his price
target to $56 from $63. Wall Street, on average, expects the
company to make $1.31 a share. Yesterday, Symbol closed at
$39.10.
"Our fears surrounding negative preannouncements, from logistic
providers like UPS and FedEx (FDX:NYSE - news) to wireless
device manufacturers like Palm (PALM:Nasdaq - news), cause
us to question how long Symbol can buck the trends surrounding
its markets," he wrote. "Our last checks with the company
(several weeks ago) indicated that order rates were still holding
up. However, our visibility on Symbol's revenue base gets
cloudier as several of its end markets continue to deteriorate."
Although Kessler said Symbol was the dominant company in the
barcode market and could very well meet his old earnings
estimate for 2001, he felt the company's stock could fall to $30,
just because the economy is that bad. |
