STRATEGIC PARTNERS
February 26, 2002
NEW YORK -- Morgan Stanley said on Feb. 26 it started coverage of NCR Corp. (NYSE:NCR - news) with a 'neutral' rating, citing NCR's stock price and the effects of a weak economy.
Analyst Rebecca Runkle said in a research note that she believes the stock, which closed on Feb. 25 at $41, is fairly valued. "More attractive entry points" would be around $35, she said.
Runkle said a weak economy is softening demand for financial self-service and retail store automation products, which is offsetting improving profitability at NCR's Teradata data warehousing segment.
Teradata is set to capitalize on a warehousing software market projected to grow more than 20 percent annually through 2005, she said, but it may struggle to build upon its customer base against IBM and Oracle.
AT NCR's current share price, Runkle said, nearly two-thirds of the value comes from the company's ATM business, whose stability makes it comparable to an annuity.
