IT giant CDW (CDW) could see a surprising boost from Donald Trump's presidency.
"We think CDW is uniquely positioned to materially benefit from potential initiatives that could be implemented under President Elect Trump," wrote RBC Capital Markets analyst Amit Daryanani in a Friday note.
Daryanani explained that if Trump achieves his goal of reaching 4% in U.S. GDP growth and implements initiatives including tax reduction, it could also lead to an overall improvement in IT spending from 2% to 4%.
Throughout his campaign, Trump has vowed to lower the corporate tax rate from 35% to around 15% to 20% in an effort to attract more businesses to the U.S. The president-elect wants to apply the same 15% tax rate across all businesses whether they are corporations or partnerships.
Part of his tax reform also includes cutting rates on companies bringing overseas cash back to the country. At the same time, though, slashing the tax rate could reduce federal tax revenue.
"We further envision lower corporate tax rates broadly could drive better demand from core CDW customers ... which could enable CDW share gains at an accelerated pace," Daryanani added.
Shares of CDW are up about 2.7% since Trump's election, and 6% year-to-date.