Ingram Micro Catches A Goldman Sachs Upgrade (IM, TECD)

Ingram Micro Inc. (NYSE: IM) is seeing a valuation upgrade from Goldman Sachs this morning.  It is being added to the Americas Buy List (after a neutral) after recent weakness is showing an opportunity to build positions at what it is referring to as “trough valuation levels.”

Goldman Sachs also noted that it expects fundamental strength across all geographies here to drive strong revenue and earnings growth in the December quarter and in 2008.  The research notes that Ingram Micro is down some 16% since early November on no real fundamental news, leaving the distributor at 9-times the Goldman Sachs calendar EPS target of $1.97.

Goldman Sachs sees this stock at $24 over the next 12 months.  This closed at $17.80 Wednesday and the 52-week trading range is $17.67 to $22.50.

We perused through First Call data and it appears that Wall Street analysts have a consensus target closer to $25 and a 2008 EPS target of $1.96, so this upgrade isn’t calling for anything that would be outlandish for a crowd of analysts.  Wall Street uses Tech Data (NASDAQ:TECD) as the comparison stock here and the valuations at Tech Data are much higher, although we would caution that there are more overlaps in more areas of the companies than a head to head comparison.

Jon C. Ogg
January 3, 2008

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