Lexmark: Facing Pricing Pressure in Printers and Decline in Supplies Revenue

UBS’ Benjamin Reitzes today cut his rating on Lexmark (LXK) to Reduce from Neutral, and trimmed his price target to $60 from $67. He also reduced his EPS estimates on the printer maker to $3.80 from $3.85 for 2007, and to $4 from $4.10 for 2008.

Reitzes says he sees several long-term issues for the company, including weakening sales at OEM partners Dell (DELL) and IBM (IBM), the potential for increased price pressures in laser printers, and a projected decline in supplies revenue in 2007. “We believe LXK’s earnings will be challenged as hardware share losses over the past year culminate in lower supplies sales mid-year,” he writes.

Lexmark was down yesterday $1.01 to $62.94.

Previously: Lexmark: Q4 Results, Q1 Guidance Disappoint; Stock Slides (January 30, 2007)