Ingram Micro (INGM) faces competition in India and weaker demand in Europe, leaving gross margin headwinds countering cost efficiencies after mixed Q4 results, Morgan Stanley said Wednesday in a report.
The Q4 results showed "better revenue but lower profitability," while a "2025 return to growth remains likely, Morgan Stanley said. Still, India is "having an outsized impact" on earnings, resulting in a lower full-year profit estimate, the report said.
"Management is optimistic on a return to topline growth in 2025, driven by continued momentum in client and endpoint solutions" and growth in cloud and other segments, Morgan Stanley said. Still, "the improving demand backdrop is not yet broad-based," the report said.
Inventory levels may fluctuate as Ingram adjusts for tariff-related cost management, the report said.
Morgan Stanley raised its price target on Ingram Micro's stock to $27 from $26 and kept its overweight rating.
Ingram Micro hares fell 7.8% in recent Wednesday trading.
Price: 19.35, Change: -1.64, Percent Change: -7.79
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.