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Morgan Stanley Downgrades CDW, Cuts PT By ~5%

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  • Morgan Stanley analyst Katy Huberty downgraded CDW Corp (NASDAQ: CDW) to Equal Weight from Overweight with a price target of $196, down from $208, suggesting a 12% upside, as part of the downgrade of her IT Hardware industry view to Cautious.

  • The firm's U.S. Equity Strategy Team believes the market is in the later innings of a mid-cycle transition, and Hardware has been the worst-performing Tech group and underperformed the S&P by 11% over the past four months, Huberty noted.

  • She points to emerging cautious data points, including a decelerating CIO Hardware spending growth outlook in 2022, rising channel inventory, and recent overconsumption of PC and peripheral products.

  • The data points signal an "impending" shift to late cycle, which should bring underperformance for the IT Hardware group.

  • While still bullish long-term on CDW, Huberty cites "near record-high valuation" and its 45% revenue exposure to PCs for her lower rating.

  • Price Action: CDW shares are trading lower by 5.4% at $174.13 on the last check Wednesday.

Latest Ratings for CDW

Oct 2021

Morgan Stanley

Downgrades

Overweight

Equal-Weight

Sep 2021

JP Morgan

Upgrades

Underweight

Neutral

Aug 2021

Morgan Stanley

Maintains

Overweight

View More Analyst Ratings for CDW
View the Latest Analyst Ratings

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