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Can Eastman Kodak Come Back in 2012?

With 2012 just beginning, now's a smart time to gauge how the stocks you're interested in are likely to do this year and beyond. By knowing what stock analysts and fellow investors expect from a stock, you'll be smarter about whether you should keep buy it for your portfolio -- or sell it if you already own it.

Today, let's take a look at Eastman Kodak (NYSE: EK  ) . As I discussed in more detail last month, the well-known camera and film company has fallen on hard times recently. But is Kodak simply going through the motions right now, or is it taking the right steps to try to recover from its 2011 slump? Below, I'll take a closer look at what people expect from Kodak and its rivals.

Forecasts on Eastman Kodak

Median Target Stock Price $1.00
Fiscal 2011 EPS Estimate ($2.48)
Fiscal 2012 EPS Estimate ($1.56)
Expected Annual Earnings Growth, Next 5 Years (12%)
Forward P/E NM
CAPS Rating (out of 5) *

Source: Yahoo! Finance. NM = not meaningful due to negative expected earnings.

What's in store for Kodak in 2012?
Many people have written off Kodak. But the company actually has some positive prospects that could help it come back from its horrible performance in 2011.

One promising area is digital printing. In December, Kodak noted that its commercial printing business has grown substantially. In addition, jobs that customers had previous done with traditional methods, such as high-speed direct mail printing, have now started to go digital. With digital printing making up only a tiny fraction of the total print production market, Kodak has plenty of room to grow in the space.

But Kodak will face strong competition from established players in printing. Hewlett-Packard (NYSE: HPQ  ) has kept control of the industry with its relatively cheap printers. Meanwhile, Xerox (NYSE: XRX  ) is also trying to stake its claim in the space, although its cheaper ink hasn't overcome the higher costs of its printers in trying to stand up to HP.

In addition, morale may be a problem for Kodak. Longtime employees have been quoted saying that they're having trouble staying optimistic about the company's future, with credit downgrades and bad financial news taking their toll.

A lot is riding on how Kodak's patent infringement lawsuits against Apple (Nasdaq: AAPL  ) and Research In Motion (Nasdaq: RIMM  ) turn out. Although an initial ruling went partially in Kodak's favor, the U.S. International Trade Commission recently delayed making a decision on the case until this September. The delay could push Kodak toward trying harder to work out a licensing deal with Apple and RIM rather than waiting for a final decision.

Overall, sentiment about Kodak looks very negative for 2012 and beyond. But with the stock trading well below $1 per share, there's a lot of upside if Kodak can get its act together and find some success again.

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Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of and creating a bull call spread position in Apple. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.


Read/Post Comments (11) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 03, 2012, at 10:59 AM, jerr1 wrote:

    Wait till earnings come out 4th quarter untill then no news good news for kodak . Going to be hugeeeeeeeeee

  • Report this Comment On January 03, 2012, at 11:19 AM, trickytom wrote:

    As a Kodak retiree, I question if digital printing is a life saver or another disaster. With the advent of smart phone, tablets and the like, will companies seek this as a more effective and cheaper way of adveriitzing? I vote yes. Small printer business is very crowded. With tablets and smart phones, people are taking greater numbers of pictures, but they are viewing them electronically and printing less and less. Similary office use is finally going more paperless. Thus are these real long term markets, or like Kodaks investment in traditional photography when digital cameras were outselling film based cameras? I vote not a long term growth market.

  • Report this Comment On January 03, 2012, at 11:41 AM, prosperpress wrote:

    The first step, of many Kodak needs to make is to ditch Perez, and do it now. The next one is stop pinning hopes on the commercial printing market. Anyone who works in print will tell you, this market is now on its last legs, just before Christmas the second biggest printing machine company went into bankruptcy (manroland) and the biggest one is not so far behind (Heidelberg share price 90% lower than 5 years ago) The only countries buying print equipment these days are the developing markets, and they wont be ready to install prospers for some years to come. Jerr1, why do yoy insist on posting such nonsense, look at the posts you made in the previous fool article. outrageous speculation with no foundation, Either your name is Perez or you are just winding people up for a laugh.

    It is such a shame, but Kodak are treading the same path as Polaroid, and will inevitably meet the same end without a wholesale change in management and direction, unfortunately time has probably run out.

  • Report this Comment On January 03, 2012, at 11:57 AM, jerr1 wrote:

    Bash all ya want about kodak ,14 bussness days till earnings an you all know what they will be ,going to be hugeeeeeeeeeee

  • Report this Comment On January 03, 2012, at 1:58 PM, cvoeagle wrote:

    Whether you are right or wrong, it is refreshing to at least raise the possibility of a turnaround for Kodak rather than the usual financial press recently which continues to bash EK at .65.

    The one thing as to EK's commercial printers, possible worth noting is the success they seem to be having in Germany of all countries, one of the most competitive in the world when it comes to engineering.

    IF the German's are buying, they must be good.

  • Report this Comment On January 03, 2012, at 2:09 PM, prosperpress wrote:

    OK, so just who are these German printers, and how many have they bought? I noted that Kodak lost 200 million dollars last quarter, how many of these machines do they need to install to stem that loss. You should also be aware that their are only 2 colour propers installed in Europe. 1 in Spain and 1 in the UK, a journalist visted them both in mid december and was not able to take 1 color print away from either. A long way from the PR story peddled by the marketing department. If you are referring to the Nexpress, development for that machine is now on the back burner in favour of the Prosper. The clock is ticking louder and louder.

  • Report this Comment On January 03, 2012, at 9:02 PM, idealblue wrote:

    Whatever, Kodak is a famous company in the past 100 years with the best film and camera products.Hope it can recover from current terrible situation. The brand Kodak will not disappear.

    Maybe some viewpoints of prosperpress is right but not all. Just like the vechile and bicyle, although the vechile is full of the street and more advanced, but more and more people is perfering to take bicyles with different purposes- health, power saving and etc. Right? So Kodak still have a long way to go with the right direction.

  • Report this Comment On January 03, 2012, at 11:22 PM, trysson wrote:

    What reverse split is it going to be; 1:3, 1:4, or 1:5?

  • Report this Comment On January 04, 2012, at 3:29 PM, prosperpress wrote:

    Jerr1, so where is this information you keep telling us, its a sad day, but Perez has lied for the last 8 quarters about the performance of this company. Chapter 11 in a few days or less. Sorry to say but the break up begins now. Gutted for all of those employees, many are personal friends, I hope you arre happy Antonio, you have done this.

  • Report this Comment On January 04, 2012, at 7:18 PM, TommyGun237 wrote:

    Dear Reader's,

    Today is January 04th, 2011. Eastman Kodak (EK), has dropped to (47 Cent's/per Share).

    Truly, I put the blame on Kodak's Board of Director's

    for not protecting there investors.

    I question the competency of the Board and there background. For example, CEO Perez, Laura Tyson,

    and numerous other Board Member's and Kodak's

    Staff are; or, were on President Obama's team of

    Economic Advisor's in Washington, DC.

    Really!

    So, how can (14, 000, 000 MILLION) JOBLESS

    AMERICAN'S BE WRONG? You tell me?

    If those economic advisor's on Kodak's Board of

    Director's are just a fraction of the President's

    team, thats been, destroying this Country into an

    economic depression ...not, recession anymore.

    You tell me then who is at fault?

    Where are the "VOTING" proxies to vote for the members of the board?

    Personally, as a holder of Kodak's Common Stock

    I got toilet paper more valuable then it!

    And I want a Congressional Committee in Washington, DC assembled to investigate

    where the billion's in dollar's went? How much

    each former Board member got compensated

    before they parachuted out the window with the dough!

    Also, its kinda ironic to here ...again, that Kodak

    is filing for Bankruptcy from another undisclosed

    source? In September of 2011, rumor's came out

    that EK would file Bankruptcy. Antonio Perez, CEO

    of Kodak and the Lt. Governor of New York came

    out public; along with, the Mayor of Rochester, NY

    and clearly indicated that KODAK will not file for

    Chapter 11. Now, here comes the renig on the deck of card's! What a crock on Kodak's board of

    Director's!!!

    This is "HAUNTINGLY" familiar here folk's ... in 2008, the auto industry in, Michigan. Went through Restructuring with (GM) & (Chrysler),

    Ford toughed it out, stock went from (Under a Dollar), to ($11.00+current, 2012). But, Kodak is

    no Ford! Strangely, Ford Credit, which is, solo from Ford Motor Company, is ($800 BILLION in

    Debt, with Only a$100 BILLION BOND) backing

    them financially??? Hmmmm?

    So, in closing, I ask, If the Board of Director's on Kodak are so much in Bed with Washington, DC, then why not ask them for Government Contract's

    to build NASA'S new tech? You gotta remember

    here the patent's and tech Kodak got's invented

    the imaging of there sat's and spy sat's and those

    orbiting planet's too!

    There must be a solution to the negativity other than bankruptcy. Doubt Obama will give Kodak a bail-out like (GM), (Chrysler) ...But, in January,

    every year the U.S. Government hand's out

    million's in Grant's and Contract's. The Money is

    there, only if the idiot's; Including the Employee's

    and Retiree's that allowed CEO Perez to remain

    in Power ...Need to take Over the Company, Now!

    And thats including this FOOL that Invested in Kodak heavily back in the hayday's!

    Either come off the ropes swinging or go down cryin! TommyGun237

  • Report this Comment On January 11, 2012, at 1:38 PM, whereisusa wrote:

    No surprise the board is now jumping ship. What happened is Perez and Faraci bunkered themselves in by hand picking the board of directors, and strategically made Perez the Chairman of the Board, a sinister strategy in my opinion. C’mon, really? Who let’s this happen? Do you think a CEO who is Chairman of the Board will put anyone on the board that might threaten him or even debate him? So now, one by one the members of the board are realizing they were played like pawns. So once they were concrete bunkered, Perez and Faraci were free and clear make business decisions that are/were clearly compensation driven for themselves and NOT for the long term viability of Kodak traditions and Kodak long term health and Kodak employees. DISGRACEFUL! Their agenda clearly seems to have been to eliminate every traditional Kodak business line by ignoring every “Kodak picture” like product or division, then selling it off. Their focus has been on inkjet commercial printing, sorry that just doesn’t fir the Kodak logo, and that’s the philosophy that has death spiraled Kodak, plain and simple. Focusing on an arena that has and will do nothing but decline, it’s obvious they have blinders on and will never embrace where Kodak should/could have been headed.

    Even if the board of directors (those that are left) came out of their comas or grew some cohonas and did what they should have done 6 or 7 years ago (do they know the function that the board of directors is supposed to do?), it’s obviously too late, the damage is irreversible.

    And now the “board of directors elected Laura Quatela” as a new Kodak President. Translation, Perez and Faraci appointing a puppet in a dire attempt to make Wall Street think something has changed and extend their lucrative salaries for who knows how much longer.

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