Kodak Jumps 8% on New Image Sensor Technology, Analyst Upgrades

On Thursday Eastman Kodak said it developed new image sensor technology for digital cameras that "will help to make dark, blurry digital photos a thing of the past." The news sent its shares up 8% to $29.19 on heavy volume, their highest close in over a year. Kodak said the first sensor is expected to available for sampling in Q1 2008. Separately, the June 25 edition of BusinessWeek suggests Kodak is undervalued, since most analysts have not considered the impact of a possible upturn in 2008 into their estimates. The article mentions no analysts rate it a "buy" and six of ten rate it a "sell." However, fund managers including Bill Miller, whose Legg Mason Capital Management owns a 24% stake, like the stock in anticipation of larger free cash flows from declining restructuring costs. Bloomberg reports a Standard & Poor's analyst said Kodak's new technology "has the potential to be a meaningful product with an impact on revenues, but we feel it's premature to consider it successful at this point." He upgraded Kodak from "sell" and boosted his share price target to $33 from $22. A Citigroup analyst also upgraded its shares to "hold."

Sources: Press release, Bloomberg, BusinessWeek
Commentary: Kodak Posts Narrower Loss, but Earnings Out of Focus with Street Estimates • Recent Earnings Strength Tied to International Exposure • Cutting the Price of Ink: Will Kodak's Turnaround Formula Work?
Stocks/ETFs to watch: Eastman Kodak Co. (EK). Competitors: Hewlett-Packard Co. (HPQ), Lexmark International Inc. (LXK), Canon Inc. (CAJ), FUJIFILM Holdings (FUJI), Sony Corp. (SNE)
Conference call transcripts: Eastman Kodak Q1 2007

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