Ingram Micro was gaining 2% to $24.74 in morning trading.
The firm set a price target of $31 for the company.
Analyst Ananda Baruah said demand is stabilizing, and the company is restoring profitability in some key regions such as Europe and Australia.
"Additionally, we believe management's broader strategy of improving product mix by expanding into higher-margin offerings should bode well for sustainable EPS growth, and concurrently, valuation multiples," Baruah wrote.
"We are raising our '14 Revenue and EPS to $43.8B and $2.60, from our prior estimate of $43.3B and $2.38, respectively. Additionally, we are introducing '15 Revenue and EPS of $46B and $3.10. Our $31 TP is 10x our '15 EPS of $3.10 and is also 1.2x the ~$25 in Tangible Book Value we believe IM attains in '15."
Separately, TheStreet Ratings team rates INGRAM MICRO INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate INGRAM MICRO INC (IM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, increase in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- IM's revenue growth has slightly outpaced the industry average of 4.9%. Since the same quarter one year prior, revenues rose by 12.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 42.85% and other important driving factors, this stock has surged by 30.02% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, IM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- INGRAM MICRO INC has improved earnings per share by 42.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, INGRAM MICRO INC increased its bottom line by earning $1.99 versus $1.54 in the prior year. This year, the market expects an improvement in earnings ($2.27 versus $1.99).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 48.1% when compared to the same quarter one year prior, rising from $53.31 million to $78.94 million.
- You can view the full analysis from the report here: IM Ratings Report