Can Pitney Bowes Recover in 2013?

As 2013 begins, now's a good time to look at the future prospects for the stocks you own. If you don't know where a company's headed in the next year and beyond, then it's impossible to make an informed decision about whether you should add the stock to your portfolio -- or sell it if you already own it.

Today, I'll look at Pitney Bowes (NYSE: PBI  ) . The longtime postage-meter specialist has struggled in 2012, because it's had to shift away from its old core mail business and move toward more modern forms of communication. Below, you'll learn more about Pitney Bowes's prospects for 2013.

Stats on Pitney Bowes

 

 

Average Stock Target Price

$15.67

Full-Year 2012 EPS Estimate

$1.99

Full-Year 2013 EPS Estimate

$1.93

Full-Year 2012 Sales Growth Estimate

(5.1%)

Full-Year 2013 Sales Growth Estimate

(2.9%)

Forward P/E

5.8

Source: Yahoo Finance.

Will Pitney Bowes revive in 2013?
Analysts have pretty high expectations for Pitney Bowes, with a target price that's 40% above current levels. But they also are realistic about the company's fundamental business prospects, expecting all of those gains to come from multiple expansion rather than earnings or revenue growth.

But Pitney Bowes' road back to success has plenty of obstacles to overcome. On one hand, digital stamp rivals Stamps.com (NASDAQ: STMP  ) and Newell Rubbermaid's (NYSE: NWL  ) DYMO Endicia unit have captured a substantial part of the online postage market, hitting Pitney in its core business. At the same time, its attempts to diversify beyond postage have it going up against well-established competitors.

Nevertheless, Pitney's best chance to rebound in 2013 comes from its business-services push. If its geocoding software deal with Facebook (NASDAQ: FB  ) goes well, then that could point the way toward a new business initiative for the company. Moreover, Pitney wants to become a one-stop business analytics and data management business, although that will pit it against IBM (NYSE: IBM  ) and a number of other major players seeking to profit from the Big Data movement.

Pitney Bowes' 14% dividend yield looks extremely attractive, but the high yield, and the cheap valuations that produce it, come from pessimistic appraisals of the stock. It's far from a sure thing that Pitney Bowes can have a better 2013 than it did last year.

The stock market has soared to start 2013, but you could be up much more over the long term. In fact, The Motley Fool wants to give you a 98.79% chance at beating the market. If you're interested in the best odds in the universe -- including more than a 70% chance at doubling the market's return over the long haul -- here's some very good news for you: Motley Fool Supernova is reopening to new members for the first time ever on Jan. 15! Get instant and free access to learn how you can get these kinds of market-beating odds by clicking here now.

Click here to add Pitney Bowes to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.


Read/Post Comments (0) | Recommend This Article (4)

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.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2180092, ~/Articles/ArticleHandler.aspx, 10/1/2014 6:45:49 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement