Tech Data stock boom to slow, analyst says

Tech Data shares sink as analyst says meteoric stock price climb cannot be sustained

• On 1:22 pm EDT, Thursday October 15, 2009

SEATTLE (AP) -- Shares of Tech Data Corp. tumbled Thursday after an analyst downgraded the stock and said the sharp rise in the technology products distributor's shares wasn't likely to continue apace.

In a note to investors, Raymond James analyst Brian Alexander wrote that increasing competition, especially in Europe, could cut into Tech Data's margins. Also, margins were boosted by benefits from exchange rates last year, making this year look weaker.

Alexander downgraded Tech Data shares to "market perform" from "outperform," but wrote that "investors should not read this downgrade as diminishing confidence in the company's execution (and) competitive positioning or a dour view on demand."

Still, Wall Street reacted negatively. Shares dropped $2.46, or 5.6 percent, to $41.77 in afternoon trading.