Lexmark International Inc.  (LXK) Trade Now »     Rate LXK  -  Discuss LXK  -  Add to Watch List        

Lexmark (LXK) shares are on the mend this morning after Citigroup’s Richard Gardner upped his rating on the stock to Buy from Hold. His price target on the shares is $37, which is actually down a buck from $38.

Gardner notes that the company has announced plans to follow Hewlett-Packard (HPQ) and raise prices on ink and toner by about 5%, a move which he says should have a significant positive impact on 2009 EPS. He says that while the inkjet business is “permanently impaired,” the company is executing well in laser printers, earning 15%-20% operating margins in that segment. Valuation, at 4

Printer maker Lexmark (LXK) this morning reported sales for its third quarter ending Sept. 30 slightly ahead of estimates, while profit came in a couple cents short. Revenue fell 5% from the year-earlier quarter, to $1.13 billion, ahead of the average Street estimate of $1.1 billion, while profit per share of 63 cents, excluding some costs, was shy of an average estimate of $.65.

For the fourth quarter, the company said it expects sales to be down “in the low to mid teens on a percentage basis” from the prior year. Last year’s Q4 was $1.31 billion, so that would be a range of $1.11 billion

First, how bad were the retail sales numbers?

J.P. Morgan’s new hardware analyst Mark Moskowitz this morning has rejiggered the firm’s ratings on the sector.

Upgrades: He boosts both Apple (AAPL) and IBM (IBM) to Overweight from Neutral.

Downgrades: He cuts Dell (DELL) and NetApp (NTAP) to Neutral from Overweight; he chops Lexmark (LXK) to Underweight from Neutral.

Some excerpts from his reports this morning:

• IBM: “In uncertain times, we think that IBM offers long-term investors a sturdy ship to navigate the macroeconomic distress that could pressure IT spending conditions in the coming year. Set against this backdrop, we expect a flight

Credit Suisse PC analyst Bill Shope this morning trimmed his forecast for 2009 PC unit growth to 9.9% from 12.7%, reflecting slowing demand in the small- and medium-sized business market. Shope also trimmed estimates for Dell (DELL), Hewlett-Packard (HPQ) and Lexmark (LXK), while leaving his projections on Apple (AAPL) unchanged.

Shope notes that discussions at this week’s Credit Suisse Asian Technology Conference in Taipei lead him to conclude that the “typical September bounce” in PC demand will be muted this year, “particularly in the SMB segment.” He says the cautious stance by SMB buyer