J.P. Morgan Survey Points to Cautious IT Spending Environment
Tweet
Share
E-mailGet Alerts AAPL Hot Sheet
Price: $257.46 -1.09%
Rating Summary:
45 Buy, 28 Hold, 7 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 0 | Down: 0 | New: 0
Rating Summary:
45 Buy, 28 Hold, 7 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 0 | Down: 0 | New: 0
Join SI Premium – FREE
A September J.P. Morgan survey points to a more cautious spending environment in IT. The bank believes that the survey results support their Sept. 10 reduction in IT spending growth forecast to 1.9%, versus 2.2% previously.
According to the survey, outside of storage, hardware trends are not good. In software there appears to be incremental pressure, but stability of maintenance and key secular trends should provide partial offsets. The services sector may hold up better than others.
“We continue to highlight Apple (Nasdaq: AAPL), EMC (NYSE: EMC), IBM (NYSE: IBM), and NetApp (Nasdaq: NTAP) (in order of preference) as our Big Four for playing defense in tough times,” said JPMorgan analyst Mark Moskowitz.
“We think that each model possesses varying levels of partial buffers to incremental macro-driven revenue and EPS shocks, relative to the peer group.
Set against the uncertain macroeconomic environment, analyst recommend trimming positions in Hewlett-Packard (NYSE: HPQ), Lexmark (NYSE: LXK), Xerox (XRX), Brocade (Nasdaq: BRCD), Emulex (NYSE: ELX), QLogic (Nasdaq: QLGC), and STEC (Nasdaq: STEC).
“In particular, the latest CIO survey results point to tough times ahead for PCs and printers. We recommend that investors avoid printing stocks Hewlett-Packard, Lexmark, and Xerox owing to the segment’s low priority in IT budgets,” said Moskowitz.
According to the survey, outside of storage, hardware trends are not good. In software there appears to be incremental pressure, but stability of maintenance and key secular trends should provide partial offsets. The services sector may hold up better than others.
“We continue to highlight Apple (Nasdaq: AAPL), EMC (NYSE: EMC), IBM (NYSE: IBM), and NetApp (Nasdaq: NTAP) (in order of preference) as our Big Four for playing defense in tough times,” said JPMorgan analyst Mark Moskowitz.
“We think that each model possesses varying levels of partial buffers to incremental macro-driven revenue and EPS shocks, relative to the peer group.
Set against the uncertain macroeconomic environment, analyst recommend trimming positions in Hewlett-Packard (NYSE: HPQ), Lexmark (NYSE: LXK), Xerox (XRX), Brocade (Nasdaq: BRCD), Emulex (NYSE: ELX), QLogic (Nasdaq: QLGC), and STEC (Nasdaq: STEC).
“In particular, the latest CIO survey results point to tough times ahead for PCs and printers. We recommend that investors avoid printing stocks Hewlett-Packard, Lexmark, and Xerox owing to the segment’s low priority in IT budgets,” said Moskowitz.
Create E-mail Alert Related Categories
Analyst CommentsRelated Entities
JPMorganSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
