Enterprise Hardware - Deutsche Banc Alex. Brown's George Elling Launches Coverage of the Industry
NEW YORK, June 20 -- Deutsche Banc Alex. Brown analyst George Elling launched research coverage of the Enterprise Hardware sector with the initiation of six companies. Sun Microsystems, Inc. (Nasdaq: SUNW - news; $14.66), EMC Corporation (NYSE: EMC - news; $26.67) and Hewlett-Packard Company (NYSE: HWP - news; $26.00) were started with a STRONG BUY investment rating. International Business Machines (NYSE: IBM - news; $114.84), Lexmark International Inc. (NYSE: LXK - news; $58.27) and Network Appliances (Nasdaq: NTAP - news; $13.29) were started with a BUY investment rating.
While Elling believes that, given the poor visibility and unsettled markets there is possibility for preannouncements or downward earnings revisions in the near term, he also contends that investors will benefit from long-term positioning. ``From an investment standpoint, investors will have to be ahead of the game and will need to take action before fundamentals have actually shown any signs of improvement in order to maximize potential capital appreciation,'' said Elling. He also believes that at current depressed levels the risk/reward ratio is compelling, and would recommend utilizing the opportunity to begin accumulating selected shares.
In Elling's opinion, the way to invest in the enterprise hardware space is on a risk-reward basis, favoring two types of stocks:
1) Companies that appear to be best positioned to exploit market
opportunities when the economy improves-Sun Microsystems and EMC; and
2) Companies that have solid business models and are currently selling at
particularly compelling values-Hewlett-Packard.
He is establishing a $30 price target for Sun Mircosystems, a $50 price target for EMC Corporation, a $40 price target for Hewlett-Packard, a $135 price target for IBM, a $70 price target for Lexmark and a $20 price target for Network Appliance.
Deutsche Banc Alex. Brown represents the Investment Banking activities of Deutsche Banc Alex. Brown Inc. (US) and Deutsche Bank Securities Ltd. (Canada). Deutsche Banc Alex. Brown and Deutsche Bank Securities Ltd. are subsidiaries of Deutsche Bank AG. With assets of about Euro 940 billion and more than 98,000 employees, Deutsche Bank offers its clients unparalleled financial services throughout the world in over 60 countries. It ranks among the leaders in asset management, capital markets, corporate finance, custody, cash management and private banking. Deutsche Bank is organized in two customer-oriented Groups: ``Corporate and Investment Bank'' (CIB) and ``Private Clients and Asset Management'' (PCAM). The keys to the Bank's success remain constant: customer focus, the spirit of innovation, a broad range of product skills combined with technological power and financial strength delivered by highly skilled professionals.
Hewlett-Packard Company, Sun Microsystems, Inc., EMC Corporation, Network Appliance Inc., Lexmark International Inc. and International Business Machines Corporation are optionable stocks.
Deutsche Banc Alex. Brown Inc. maintains a net primary market in the common stock of Sun Microsystems, Inc. and Network Appliances Inc.
Within the past three years, Deutsche Banc Alex. Brown Inc. has managed or comanaged a public offering of Network Appliance Inc. and International Business Machines Corporation.
There are convertible issues outstanding on International Business Machines Corporation, Hewlett-Packard Company and EMC Corporation.
The author owns shares in IBM Corporation.
Information herein is believed to be reliable and has been obtained from sources believed to be reliable, but its accuracy and completeness cannot be guaranteed. Opinions, estimates, and projections constitute our judgement and are subject to change without notice. This publication is provided to you for information purposes only and is not intended as an offer or solicitation for the sale of any financial instrument. Deutsche Banc Alex. Brown Inc. and its affiliates worldwide, may hold a position or act as market maker in the financial instruments of any issuer discussed herein or act as advisor or lender to such issuer. Transactions should be executed through a Deutsche Bank entity in the client's home jurisdiction unless otherwise permitted by law. Deutsche Banc Alex. Brown Inc. is a member of NYSE and NASD.
SOURCE: Deutsche Banc Alex. Brown Inc. |
