Can Pitney Bowes Recover in 2013?

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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


Full-Year 2012 EPS Estimate


Full-Year 2013 EPS Estimate


Full-Year 2012 Sales Growth Estimate


Full-Year 2013 Sales Growth Estimate


Forward P/E


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 (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.

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

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