Analyst Ruplu Bhattacharya of Bank of America Securities reiterated a Hold rating on CDW (CDW – Research Report), with a price target of $225.00.
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Ruplu Bhattacharya’s rating is based on a combination of positive trends and lingering uncertainties. The recent quarterly performance of CDW was mostly better than expected, particularly with the Small and Medium Business (SMB) sector showing year-over-year growth for the first time in two years. This is a positive indicator as SMB is often a precursor to a shift in market sentiment. Additionally, there was a quarterly improvement in the gross margin of the core business, and moderate growth was observed in the U.S. market for various segments including client devices and storage, suggesting potential improvements in 2025.
Despite these positive signs, the management’s guidance for fiscal year 2025 remains conservative, anticipating low-single-digit growth in revenue, gross profit, and earnings per share. This cautious outlook is due to uncertainties such as new tariffs and changes in government and education sectors that could impact demand. The sentiment among customers is still cautious, and artificial intelligence has not significantly boosted sales yet. Hence, Bhattacharya sees 2025 as a critical period for CDW to prove its execution capabilities, leading to a Hold rating with a price objective of $225.
In another report released on February 6, Morgan Stanley also maintained a Hold rating on the stock with a $201.00 price target.