13th Apr 2007 17:00
Dutton Associates updates its coverage of Xaar plc (LSE:XAR)maintaining a Buy rating and a GBP 3.50 (US$6.15) target price. The7-page report by Dutton senior analyst Rafael Kapelinski is availableat www.jmdutton.com as well as from First Call, Bloomberg, Zacks,Reuters, Knobias, and other leading financial portals. £ We reiterate our Buy rating on Xaar Plc, as we continue to believethat the Company should increasingly emerge as one of thebeneficiaries of the ongoing push towards digital inkjet by largeimaging OEMs such as Kodak, Fuji, and Agfa. At the same time, ourindustry sources indicate that sales of wide format digital printershave slowed down somewhat and price reductions by the OEMs have beencommonplace. EFI has not posted its 4Q 2006 results, so it isdifficult to verify these signals even in a cursory fashion, but webelieve the increasing market saturation is beginning to dampen sales.As a result, we do believe that Xaar's mid-term outlook should bedefined by the relative success of the Gen 2 and Gen 3 printingplatforms on one hand, and negotiations with industry takeover suitorson the other. Xaar's 2H 2006 results were slightly below estimates.Revenues came in at GBP 19.9, down 10.7% over 1H 2006, when theCompany experienced trading problems in China. Total annual 2006revenue figure was GBP 42.21 million, down 1.3% over 2005. Our newforecast calls for revenues of GBP 45.2 million (+6.9% year-on-year)and EPS of GBP 0.077 versus GBP 50.95 million and GBP 0.011previously, respectively. Most importantly, in 2007E the Companyshould see first revenues from Gen 2 and Gen 3 printing platforms. £ About Dutton Associates £ Dutton Associates is one of the largest independent investmentresearch firms in the U.S. Its 31 senior analysts are primarily CFAsand have expertise in many industries. Dutton Associates providescontinuing analyst coverage of over 140 enrolled companies, and itsresearch, estimates, and ratings are carried in all the majordatabases serving institutions and online investors. £ The cost of enrollment in our one-year continuing research programis US $35,000 prepaid for 4 Research Reports, typically publishedquarterly, and requisite Research Notes. Dutton Associates receivedUS$72,500 from the Company for 8 Research Reports with coveragecommencing on 6/15/05. The Firm does not accept any equitycompensation. Our principals and analysts are prohibited from owningor trading in securities of covered companies. The views expressed inthis research report accurately reflect the analyst's personal viewsabout the subject securities or issuer. Neither the analyst'scompensation nor the compensation received by us is in any way relatedto the specific ratings or views contained in this research report ornote. Please read full disclosures and analyst background atwww.jmdutton.com before investing. Copyright Business Wire 2007Related Shares:
Xaar