Expect NCR Corp. to Outperform

Following several years of stagnant revenue growth, NCR Corporation (NCR - Analyst Report) has begun to post gains in its Financial Self-Service segment, its largest division. NCR now expects 2008 year-over-year revenue growth of 5% to 7% from continuing operations, up from previously provided guidance of 3% to 5% revenue growth.

We are encouraged that the company is now posting earnings growth through its improved top-line, which we believe is sustainable for the foreseeable future as its customers seek to cut costs through increased automation. Although its fastest growing business, Teradata, is no longer a part of the company, we are encouraged with growth in Financial Self-Services, as well.

Shares of NCR are currently trading at 16.6x our 2008 EPS estimate of $1.54, a discount to the industry mean. Given the improved outlook for NCR, we maintain our Buy rating on the shares. Our six-month target price of $32 reflects a P/E multiple of 20.8x our 2008 EPS estimate, a premium to the industry median.

Read the full analyst report on NCR.

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