PBI: Why Pitney Bowes Is Trading Higher Today

Its legacy mail business will be stable for years

   

PBI: Why Pitney Bowes Is Trading Higher Today

Shares of Pitney Bowes (PBI) surged more than 3% in Monday morning trading after a Barron’s article presented an upbeat outlook for the mail machine-maker.

PitneyBowesLogo PBI: Why Pitney Bowes Is Trading Higher TodayAccording to Barron’s Jack Hough, PBI shares could gain 60% over the next three years. Hough noted that since Pitney Bowes brought in new CEO Marc Lauterbach in December 2012, PBI shares have more than doubled.

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Despite predictions of the demise of snail mail, Hough notes that PBI’s legacy postal businesses were still “hugely profitable” in the last quarter, while its non-postal businesses have “soaring” revenues.

Hough expects PBI revenue to remain flat this year. Incoming years, revenue growth will be modest. He predicts PBI’s EPS to jump from $1.88 last year, to $3 by 2017.

PBI earnings before interest and taxes (EBIT) for the most recent quarter were 35% of revenue. Hough notes that Apple’s (AAPL) latest EBIT margin was 30%.

On Friday, PBI stock closed at $26 per share.

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Article printed from InvestorPlace Media, http://investorplace.com/2014/05/pbi-pitney-bowes-trading-higher-today/.

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