) to buy from hold.
Analyst Peter Ausnit says the upgrade is based on the company's improving analog to digital consumer photo strategy, expectations for a solid fourth quarter and upbeat 2003 guidance on Jan. 22, a 5% dividend yield, and better long-term Health Imaging margins.
Ausnit notes new discount cash flow assumptions compelled him to raise his $35 target to $45. He also says the new "Perfect Touch" (PT) processing digitally improves prints, and Kodak expects about 25% of consumers to choose PT, which could generate incremental revenues of $75 million to 80 million. He says PT adds credibility to its consumer digital photo strategy.
Ausnit sees $2.81 2002 earnings per share, and $2.89 for 2003.