Here's why Zacks senior technology analyst Steve Biggs, CFA is reiterating his Buy recommendation on shares of NCR Corporation (NCR) at the present time:
'Following several years of stagnant revenue growth, NCR Corporation has begun to post gains in its Financial Self-Service segment, its largest division. We are encouraged that the company is now posting earnings growth through improved top-line growth, which we believe is sustainable for the foreseeable future as its customers seek to cut costs through increased automation.
'As a result, we maintain our Buy rating on NCR shares with a new six-month price target of $41.00 to reflect the impact of the Teradata spin-out. The companys data warehousing business was spun off as to shareholders during the third quarter of 2007. The new company, Teradata Corporation (TDC), now owns the assets and liabilities associated with the Teradata business, and its common stock trades on the New York Stock Exchange as of October 1, 2007.
'In the other business areas, such as Customer Service and Retail Automation, the company has also been making a steady progress. NCR is also targeting new industry verticals, for instance healthcare and travel and hospitality, to expand its market reach for self-service business. Given the improved outlook for NCR, we maintain our Buy rating on the shares of NCR and expect the stock to approach the industry median multiple of 27.8x. Our new price target of $41.00 is based on a P/E multiple of 27.3x.'
Read the full analyst report on NCR.
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