Nucor earnings beat by $0.08, revenue fell short of estimates
On Tuesday, Jefferies adjusted its outlook on Ingram Micro (NYSE:INGM) shares, lowering the price target to $24 from the previous $28 while still maintaining a Buy rating on the stock. Currently trading at $19.98, InvestingPro analysis suggests the stock is undervalued, with analyst targets ranging from $22 to $30. The decision comes after a thorough evaluation of the company’s fourth-quarter results from 2024 and an updated financial model for the year 2025.
Ingram Micro’s revenue projections for 2025 have been slightly increased according to Jefferies, but the adjusted earnings per share (EPS) estimate has been reduced by $0.44 to $2.69, while InvestingPro data shows a consensus FY2025 EPS forecast of $2.91. The lowered EPS forecast is mainly attributed to the company’s ongoing sales mix, which continues to skew towards simpler, lower-margin products and solutions, reflected in the company’s modest gross profit margin of 7.18%.
The firm notes that the recent uptick in market volatility could potentially delay sales of more complex solutions, despite the anticipation of a PC refresh cycle. This factor was considered in the reassessment of Ingram Micro’s financial projections and the resulting price target adjustment.
Jefferies reaffirmed its Buy rating for Ingram Micro, emphasizing that despite the changes in sales mix and the potential for delayed sales, the valuation of Ingram Micro remains attractive. This sentiment underpins the firm’s decision to maintain a positive long-term outlook on the stock despite the near-term adjustments to their model.
In other recent news, Ingram Micro reported its fourth-quarter 2024 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $0.92 and revenue of $13.34 billion, reflecting a 2.5% year-over-year increase. The company also achieved a full-year net sales figure of $48 billion, remaining flat compared to 2023. Despite these positive results, Ingram Micro provided a cautious forecast for the first fiscal quarter of 2025, projecting revenues of $11.6 billion and EPS of $0.56 at the midpoint. Analysts at BofA Securities reiterated a Buy rating for Ingram Micro, maintaining a price target of $28, while Evercore ISI adjusted its price target to $26, citing competitive pressures and a product mix shift as influencing factors. The company continues to experience robust growth among large and enterprise customers, although it faces challenges in the small and medium business (SMB) and public sector segments. Ingram Micro’s strategic focus remains on digital transformation and cloud growth, with significant cost reductions expected from restructuring initiatives.
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