Prudential downgraded Ingram Micro (IM) to neutral from overweight, after the Santa Ana, Calif.-based technology distributor posted quarterly results on Tuesday.
Ingram Micro said it had 51 cents earnings per share (EPS) in the fourth quarter, compared to 48 cents during the same period of 2004. It sees 32 cents to 35 cents EPS in the first quarter of 2006.
Analyst Steven Fortuna says that the company's good times have mostly played out, however. While he thinks the company can improve its operations incrementally in 2006 and 2007, he thinks its already made most of the cost reductions and improved the operating efficiencies that it can. He thinks most of the improvement in North America has been done already, Europe operations are at near peak efficiency, and Asia only represents 17% of revenue. He cut his $24 stock price target to $22.