Markets & Finance

UBS Warburg Upgrades Lexmark to 'Buy'

UBS Warburg upgraded Lexmark (LXK) to buy from neutral.

Analyst Ben Reitzes says he upgraded the printer maker due to the potential for more a benign inkjet pricing environment into 2004, substantial leverage to laser printer growth in enterprise, and continued upside to estimates. He raised the $3.55 2004 earnings per share estimate to $3.65, based on 8% revenue growth. He also upped the $4.00 2005 estimate to $4.05, reflecting a better mix of laser-printer supplies. He hiked the $80 target to $88.

Reitzes says while Lexmark didn't offer an outlook beyond 2003, and there's no significant news as a catalyst, Lexmark seems more upbeat than usual about its prospects for gaining market share and generating strong cash flow.

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