) to "buy," from "hold."
Analyst Charles Wolf says printer revenue growth is beginning to accelerate as the company's original equipment manufacturing pact with Dell gains momentum. He believes Lexmark's first-quarter revenue could grow 18%, far better than the company's guidance of high single digits, because Lexmark didn't ship any Dell-branded printers in the first quarter of 2003 but should ship around one million printers this quarter.
Wolf raised the $3.35 2004 earnings per share estimate to $3.70, and set a 2005 estimate of $4.35. He believes Lexmark will continue to manage its capital more efficiently, which, in turn, translates into higher free cash-flow estimates.