15% Upside to Lexmark from Higher Laser Printer Market Share Expectations
Lexmark (NYSE:LXK) manufactures and sells laser printers and cartridges primarily to business customers in North America and Europe. It competes with HP (NYSE:HPQ), Xerox (NYSE:XRX), Canon (NYSE:CAJ), and Kyocera (NYSE:KYO) in the printer business. We currently have a Trefis price estimate of around $40 for Lexmark’s stock, about 5% above the current market price of around $38.
Trefis members have created forecasts for two key drivers of Lexmark’s stock over the last week: (1) Lexmark Laser Printer Market Share and (2) Lexmark Laser Cartridge Pricing. The members’ forecasts suggest that Lexmark Laser Printer Market Share will trend slightly above the Trefis estimate.
We estimate that Laser Printers & Cartridges constitute around 78% of the $40 Trefis price estimate for Lexmark’s stock. Hence the stock is quite sensitive to (1) Lexmark Laser Printer Market Share and (2) Lexmark Laser Cartridge Pricing. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.
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- Lexmark Earnings Preview: Decline In Revenue To Continue
- What Percentage of Lexmark’s Stock Price Can Be Attributed To Growth?
- Lexmark Earnings: Revenue Declines More Than Expected
1. Lexmark Laser Printer Market Share
The average of forecasts for Lexmark Laser Printer Market Share created by Trefis members indicated a projected increase from 4.2% in 2010 to 4.8% by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 3.7% in 2010 to 4% by the end of the Trefis forecast period. The member estimates imply an upside of 15% to the Trefis price estimate for Lexmark’s stock. In the past, Lexmark Laser Printer Market Share has decreased from around 10% in 2004 to around 3% in 2009.
Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Lexmark’s stock to Lexmark Laser Printer Market Share.
Our complete analysis for Lexmark Laser Printer Market Share is here.
2. Lexmark Laser Cartridge Pricing
The baseline Trefis estimate projects a decrease from around $184 in 2010 to around $147 by the end of the Trefis forecast period. In the past, Lexmark Laser Cartridge Pricing has decreased from $250 in 2004 to $192 in 2009.
Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Lexmark’s stock to Lexmark Laser Cartridge Pricing.