Kodak Rises on Hopes for Film-Market Gains
One of the longest-suffering old-economy stocks--Eastman Kodak--is finding new fans on Wall Street, albeit nervous ones.
The stock (EK) jumped $2.38 to $60.50 on Tuesday as two analysts noted the largest U.S. maker of photographic film could be gaining back market share it lost in the last quarter.
The company is gaining [market] share without lowering prices significantly,” PaineWebber analyst Ben Reitzes told Reuters. “This bodes well for near-term earnings and is good news for Kodak given the margin pressures that surfaced in the second quarter.”
He issued a research note earlier Tuesday that said, “Kodak appears to be well on its way toward completely regaining its lost share from early in the year.”
Kodak said in its second-quarter earnings report that it lost 1 percentage point in market share from last year, when it had an estimated 40% share globally in consumer color film and 50% in the professional color film business.
Salomon Smith Barney analyst Jonathan Rosenzweig issued a research note Tuesday saying the company “likely picked up some market share” in the last month. He maintained his “outperform” rating on the stock.
Investors have been concerned that Kodak’s exclusive arrangement to sell film through Wal-Mart’s Sam’s Club wholesale chain would renew a price-cutting war with arch-rival Fuji Photo Film of Japan. Fuji started a price war in 1997 that hammered Kodak. The stock peaked at about $93 that year.
“We believe Kodak is trying to lock up enough key accounts so that Fuji’s ability to even try playing the pricing game is diminished,” said Rosenzweig.
