Thursday November 5, 9:00 pm Eastern Time
RESEARCH ALERT - Merrill sees Lexmark
Q4 on track
NEW YORK, Nov 5 (Reuters) - Merrill Lynch analyst Steve
Milunovich said on Thursday Lexmark International Group Inc.'s
(NYSE:LXK - news) fourth quarter appears to be on track, ''based on
good demand in October'' for the computer printer maker's products.
-- With near-term visibility good on the company's business, Milunovich said he was raising his
12-month price target on the stock to $80 from $72.
-- In published remarks, the top Merrill computer analyst said he ''conservatively'' projected that
Lexmark's fourth quarter earnings will be $1.05 per share, based on 17 percent revenue growth to $861
million.
-- The Wall Street consensus estimate was $1.04 per share, according to a recent First Call survey.
-- He said that Lexmark management thinks the pricing environment for its printers is relatively stable,
noting that equipment margins actually improved in the third quarter.
-- ''We think Lexmark is favorably positioned, relative to HP's new product introductions,'' Milunovich
added. He was referring to rival Hewlett-Packard Co. (NYSE:HWP - news), the dominant player in the
desktop printer market, with a majority of the business.
-- Lexmark, together with partner Compaq Computer Corp. (NYSE:CPQ - news), has a 14 percent
share, according to industry estimates.
-- However, Lexmark may take a price cut on its Optra S 1275 laser printer to compete with HP's Color
LaserJet 4500, he said.
-- Lexmark stock was up 7/8 to $72-3/4 in mid-afternoon trading on about average daily volume.
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