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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Read/Post Comments (16) | 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 10:39 AM, prginww wrote:

    I hope Kodak can turn it around and save my job of 20 plus years. It's looking bleak from inside but hopefully someone will bail us out and allow us time to get technology to market in the commercial printing. Kodak has a big hurdle with respect to film, cameras, and AIO printers which have not been profitable and competition seems to be winning market share. Cheap ink is one thing but you need people to buy your products.

  • 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 11:20 AM, prginww wrote:

    Unfortunately there were probably more Ipads, iphones, XBox 360, and Kindles under the Christmas tree than Kodak cameras and printers.

    Didn't see many people buying Kodak products in stores over the holidays - hopefully they all bought online. Haven't seen many teenagers using Kodak cameras - all have Smart phones.

    Kodak must rethink and come out with a new product that can sell. Aplle could never have survived on the Apple computer alone. Yeh, they have a nice niche Mac market but that doesn't pay there bills and didn't put $70B cash in the bank. Kodak has the talent - but not the leaders.

  • Report this Comment On January 03, 2012, at 11:29 AM, prginww wrote:

    I agree with trickytom. Kodak is all about digital and paper - yet paper is going away. Maybe not for the older people but for the younger generation. Soon all bills (most) will be paperless - it just makes sense. Yes it hurts the Post Office and companies like Kodak that simply say paper will not go away - Unforatunately, paper will go away and so will Kodak. Who would have thought landlines would disappear? For most a Smart phone and maybe an Ipad has replaced the cameras and even laptops for many. People don't print photos - they take 1000's and upload and share on Facebook. It's a paperless world. It's a digital world. Film? Cameras? And sure there will still be a niche market for cameras but Kodak doesn't even have a professional camera? According to Consumer Reports the highest ranked Kodak camera didn't make the TOP 100 cameras. Kodak has a big problem ahead. Even a $3B patent sale doesn't fix the business plan problems.

  • 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 12:28 PM, prginww wrote:

    Jerr1 you obviously don't work for Kodak. Trust me 4th quarter will not be pretty. Not sure where you think you are getting your info? I agree with ProsperPress - Perez has to take the hit and resign or be fired. When you see the Board stepping down (3 already) you know legal issues are ahead. Chapter 11 is not far off and is probably the best thing of us. As an employee Perez has told us there is MORE right with Kodak than wrong with Kodak - yet at 64 cents per share - I don't think investors nor the media agree with Perez. Maybe Perez should go back to college and get his degree which he never received.

  • 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 3:15 PM, prginww wrote:

    ProsperPress is correct about the Prosper Press installs in Europe. Even world wide the installs can counted on two hands. When a company is losing $200M or $300m per quarter it doesn't take a genious to realize the Prosper Press cannot save the sinking ship along. It's only a $2M to $4M product and even with consumables it cannot bridge the $200M/$300m shortfall. Prosper Press like all the previous Commercial Inkjet Printing (Mead, Diconix, Kodak, Scitex and Kodak again) - will always have a nice niche market - but not the market that everyone touts. It is not for everyone - and unlike in the past there is also competition in this high speed inkjet market. It is Offset like - but it is NOT Offset quality. It allows for variable data printing which is the true value - but again Prosper Press cannot and wil not be enough to save Kodak and all the other failed business categories. The only way Prosper Press will survive is to once again be sold off to someone who can continue to invest in it's advanacements - not have hiring freezes, pay freezes, budget cuts, cost cuts, etc. Employee morale has hit rock bottom - you cannot survive in that mode.

  • 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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