Articles for Lexmark

Lexmark Targets Middle East Growth with MAF Retail Partnership

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Monday, January 2nd, 2012 by Trefis Team

Lexmark International (NYSE:LXK) recently signed an agreement to provide printing and imaging solutions to the leading Middle East retail giant, MAF Retail, across its region-wide network. The deal covers nearly 70 Carrefour Hypermarkets & Supermarkets across 8 Middle Eastern countries including the UAE, Saudi Arabia, Oman, Kuwait, Bahrain, Qatar, Egypt, Jordan and the company’s corporate headquarters. This is a welcome development for the hardcopy peripheral maker especially as it lost significant market share in the third quarter of 2011. Lexmark along with other key players in the market like Canon and Epson lost significant share in the quarter to the market leader HP (NYSE:HPQ), which further extended its dominating share to 56% in the U.S. hardcopy peripheral market. ((U.S. Hardcopy Peripherals Market, IDC)

We currently have a $32.62 Trefis price estimate for Lexmark, which is in line with the market estimate.

Lexmark Look Like a Dud, Except for its Imaging Solutions Business

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Thursday, December 8th, 2011 by Trefis Team

Lexmark (NYSE:LXK) third quarter results showed that it continues to be a slow-growing, old technology business focused on laser and ink jet printers and cartridges. Revenues were up 1% over the previous year and profit was down 4%. While its software and enterprise focused portion of the business seems to be improving some, the vast majority of revenue still comes from low margin hardware. Trefis believes that new competitors could potentially force prices lower by producing lower cost printers and ink that could weigh on its outlook. Strapped retail, government and business consumers visiting their local Staples (NASDAQ:SPLS) or Office Depot (NYSE:ODP) will be happy to choose the lowest priced option. If the EBITDA margin dips, the company’s stock price will most likely fall as well.

Lexmark Looks Fully Valued at $33, Announces Dividend

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Wednesday, November 2nd, 2011 by Trefis Team

Lexmark International (NYSE:LXK) reported better than expected revenue growth – up merely 1% year over year – in its recently announced third quarter earnings but the stock price dropped as profits slid 6.9% on account of higher costs. The stock has recovered since as the company announced initiation of a quarterly dividend program soon after. Lexmark is relatively small player in the printer market compared to giants like HP (NYSE:HPQ), Canon (NYSE:CAJ) and Epson.

We currently have a $32.62 Trefis price estimate for Lexmark, in line with market estimates based on our DCF valuation model.

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Lexmark is Banking on the Enterprise Market

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Thursday, May 19th, 2011 by Trefis Team

Lexmark (NYSE:LXK) has continuously lost market share in the laser printer market due to slowing printer hardware industry and increased competition from market leader HP (NYSE:HPQ) and other players Xerox (NYSE:XRX), Canon (NYSE:CAJ), and Kyocera (NYSE:KYO). Moreover, increased digital consumption of information through mobile devices like e-readers and tablets has reduced the usage of paper. This trend of digital content consumption may adversely affect Lexmark’s printer & cartridges sales. While we estimate Lexmark’s laser printer market share will gradually rise to 4% by the end of our forecast period, Trefis members predict a slightly higher share of 4.6%, translating into just under 10% upside to our LXK stock price estimate.

10 Tech Stocks with Highest Cash Contributions vs. Stock Value

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Monday, April 4th, 2011 by Trefis Team

Cash is king – or it is at least for these tech giants. Every few months we take a look at how cash contributes to tech firms’ stock values in order to assess how capable these firms are of making sizable commitments to acquisitions, R&D or paying dividends. We note that Texas Instruments’ (NYSE:TXN) $6.5 billion for National Semiconductor (NYSE:NSM) at a whopping 78% premium to its stock price prior to the announcement could help spark some consolidation in the tech sector amid an already healthy M&A environment. This time around Motorola Mobility (NYSE:MMI) tops our list while many of the usual suspects like Nokia (NYSE:NOK) and Qualcomm (NASDAQ:QCOM) also make the list for their cash holdings.

Are Tablets Bad News for Lexmark?

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Thursday, March 10th, 2011 by Trefis Team

Lexmark International (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.

Perceptive Software Worth 10% of Lexmark’s Value, See 30% Upside

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Tuesday, March 1st, 2011 by Trefis Team

Last year in June, Lexmark International (NYSE:LXK) acquired Perceptive Software, a leading provider of Enterprise Content Management (ECM) software and solutions, adding to its portfolio a complementary, fast growing software business aligned with its existing industry-focused value proposition. Lexmark 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. The acquisition has allowed Lexmark to participate in the adjacent ECM software solutions market providing additional growth and a new revenue stream in software maintenance and professional services.

We estimate that Perceptive Software makes up nearly 10% of our $47.40 Trefis price estimate for Lexmark’s stock, which is about 30% above the current market price.

Lexmark Market Share Recovery on Laser Printer Focus Gives Upside for Stock

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Monday, January 3rd, 2011 by Trefis Team

Lexmark’s (NYSE:LXK) market share in laser printers has consistently declined in the past few years because of declining share of Dell (NASDAQ:DELL) in Lexmark’s revenues and faster growth by competitors HP (NYSE:HPQ), Samsung and Canon.

As Lexmark increases its focus in laser market, we expect it to gain some share from smaller players, which should stall further decline in its market share.

We currently have a Trefis price estimate of $39.90 for Lexmark’s stock, about 11% above the current market price of $35.52.

Trend in Printers & Displays Not Good for Dell

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Tuesday, August 31st, 2010 by Trefis Team

Due to expectations for falling printer and monitor display prices, we estimate that the Printers and Display business of Dell (NASDAQ:DELL) accounts for only around 3% of the $17 Trefis price for Dell’s stock (44% above the current market price of $12). Dell faces a barrage of competition from players like HP (NYSE:HPQ), Lexmark (NYSE:LXK) and Samsung that will make it hard for Dell to gain significant share in printers or displays to offset the impact of falling hardware prices.

Slower Laser Printers & Cartridges Growth Could Mar Lexmark

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Thursday, August 26th, 2010 by Trefis Team

Flat market share in laser printers and more than expected decline in laser cartridge pricing could drag down Lexmark’s (NYSE:LXK) stock by 7%. Laser printers and cartridges together account for close to 80% of Lexmark’s stock price, which makes the stock very sensitive to (1) Lexmark Laser Printer Market Share and (2) Lexmark Laser Cartridge Pricing.

Trefis members have created forecasts for the above key drivers of Lexmark’s stock over the last week and their forecasts suggest that both drivers will trend roughly in-line with the estimates of the in-house team of analysts at Trefis. Lexmark competes with HP (NYSE:HPQ) and Dell (NASDAQ:DELL) in printers and cartridges market. We currently have a Trefis price estimate of $40 for Lexmark’s stock, about 13% above the current market price of $35.

Below are charts showing recent estimates created by Trefis members for the two drivers in detail.