Asia tech stocks slide tracking Wall St losses amid AI doubts, govt. uncertainty
Tuesday, UBS analysts maintained their Buy rating and $135.00 price target for Veritiv Corp (NYSE:VRTV) shares. The firm’s analyst, Amit Mehrotra, utilized the UBS HOLT framework to evaluate the stock’s valuation following a significant decline. Veritiv’s stock has experienced a notable drop of over 30% in the last 30 days, contrasting with the Industrial Select Sector SPDR Fund’s (XLI) 4% decline during the same period.
Mehrotra addressed the recent market concerns, particularly those related to AI infrastructure, which have impacted Veritiv’s share price. The sell-off was triggered by issues first with Deepseek and later with Microsoft-related capital expenditure worries. Despite these concerns, Microsoft (NASDAQ:MSFT) confirmed today that while it may strategically pace or adjust infrastructure in some areas, it still plans to invest $80 billion this year on infrastructure.
The UBS analyst believes that the market reaction to these developments has been excessive. According to his analysis, the current share price suggests an implied reduction of more than 30% in data center capacity growth compared to the expectations from just a month ago. This assessment points to a discrepancy between the company’s fundamental outlook and the stock’s recent performance.
Mehrotra’s commentary highlights that, despite the recent challenges faced by the company, the UBS HOLT framework indicates that the share price may not fully reflect Veritiv’s growth prospects. The firm’s stable Buy rating and price target suggest confidence in the company’s ability to navigate through the current market turbulence.
Veritiv Corp, a B2B distributor of packaging, facility solutions, print, and publishing products and services, has not seen any changes to the fundamentals that would justify the sharp decline in its stock price, according to UBS’s analysis. The investment firm’s reiteration of a positive outlook for Veritiv stock indicates a belief in the company’s underlying value and potential for recovery.
In other recent news, Vertiv Holdings (NYSE:VRT) Co reported fourth-quarter earnings that surpassed analyst expectations, with adjusted earnings per share of $0.99, exceeding the consensus estimate of $0.82. The company’s revenue for the quarter reached $2.35 billion, outperforming the expected $2.16 billion and marking a 26% increase from the previous year. This robust performance was attributed to significant growth in the hyperscale and colocation data center markets. Looking ahead, Vertiv projects first-quarter 2025 earnings per share between $0.57 and $0.63 on revenue of $1.9 to $1.95 billion. For the full year 2025, the company anticipates earnings per share of $3.50 to $3.60 on revenue ranging from $9.12 to $9.27 billion.
Meanwhile, UBS analysts maintained a Buy rating on Veritiv Corp, reiterating a $135 price target for the company’s stock. They highlighted the potential for significant growth in Veritiv’s organic orders, driven by capital expenditure plans in the data center and artificial intelligence sectors. UBS projects Veritiv’s organic orders to grow from $9.8 billion in 2024 to $12.6 billion by 2026, suggesting a cumulative order growth of 30%. Despite recent declines in stock value and forward valuation, UBS remains confident in Veritiv’s ability to capitalize on market demands.
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