We maintain our Sell rating on shares of The Corporate Executive Board Company (EXBD) following the release of Q1 results. Although Q1 results exceeded expectations, the majority of the upside was attributable to timing issues, and we note that management left its full-year earnings guidance unchanged. Given the current operating pressures, along with ongoing concerns regarding a slowing economy, we believe the shares should trade at a discount to the peer group average.
In light of these issues, we anticipate that the company's shares will under-perform the market in the near-term, and as such, we rate the shares of EXBD a Sell at this time. We believe the shares of The Corporate Executive Board are overvalued near current levels, in light of the weak conditions in the current operating environment.
Although Q1 results came in ahead of expectations, a significant portion of the upside was due to timing issues, and we note that management left its full-year EPS outlook unchanged despite the better-than-expected results in the first quarter.
We have identified several concerns within the company's current operating statistics, which we have detailed above. Given the current operating pressures, along with ongoing concerns regarding a slowing economy, we believe the shares should trade at a discount to the peer group average.
Our target price of $36 per share equates to roughly 17x our 2008 EPS estimate. In light of these issues, we anticipate that the company's shares will under-perform the market in the near-term, and as such, we rate the shares of EXBD a Sell at this time.
Read the full analyst report on EXBD.
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