CDW downgraded to Neutral from Overweight at JPMorgan

JPMorgan downgraded CDW (CDW) to Neutral from Overweight with a price target of $235, down from $260. The firm says CDW is likely to find it challenging to justify the premium valuation its shares have traded at in recent years given the continued headwind from “sluggish” enterprise spending and the limited levers that the company has been able to use to offset the headwinds to earnings growth. CDW’s execution and consistency of earnings growth delivery over the last decade has been marred by largely flattish earnings growth in 2023 and now the potential for another flat year in 2024 given continued headwinds, the analyst tells investors in a research note. JPMorgan expects lower enterprise IT spending, which is anticipated to remain soft into 2025, will limit the the opportunity for CDW to repeat the annual earnings growth of 9% it delivered between 2014 and 2022.