KODK Stock Forecast: The $400.46 Billion Commercial Printing Industry Is A Tailwind For Kodak

The KODK stock forecast was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.

Summary:

  • KODK’s stock has downward momentum but I Know First’s AI-powered stock prediction algorithm is bullish.
  • I prioritize I Know First’s algorithm over the pessimistic emotions of investors who have been pummeling KODK’s price down for the past 6 months.
  • Kodak does not need any U.S. government loan to expand to pharmaceuticals.
  • Kodak can survive and prosper solely on its core printing and chemicals businesses.
  • Bad management does not make Kodak a bad company.

Aside from its disappointing FY2020 report last March,  the insider trading scandal is why Eastman Kodak (KODK) has a -23.15% 6-month price performance. KODK is a falling knife based on the chart below. I am not afraid of catching falling knives. Kodak is a buy for long-term investing purposes. Bad managers do not dispel the fact that Kodak has a slow-but-reliable growth driver in the $440.46 billion commercial printing industry.


(Source: Seeking Alpha)

A negative momentum trend is a dangerous thing to go against. However, going contrarian while the bearish emotion is strong can be profitable sometimes. I dare to say KODK is a buy because the Artificial Intelligence algorithm of I Know First gives KODK a bullish 1-year forecast score of 138.64.

The forecast score from I Know First is more important than the technical indicators and moving averages buy/sell signals of a stock. I still say KODK is a buy even though the monthly moving averages are saying it’s a sell.

(Source: Investing.com)

Kodak Has A Safe Moat In The Printing Industry

My fearless forecast is that Kodak can still prosper even without expansion to pharmaceuticals. It did not faze me when the U.S. government did not release the $765 million it promised to Kodak to produce pharmaceutical ingredients. My long-term view is that Kodak can just focus on its printing-related products. The screenshot below convinced me that Kodak’s investment quality is acceptable. Any company that can generate more than $800 million/year in printing is a worthy investment.

(Source: Kodak.com)

Kodak is still profitable even though it is clearly a pandemic victim. Management only needs to focus on improving Kodak’s digital printing strategy to turn around the company. At the moment, Kodak only has 2 digital presses for the print packaging market. Compare this to the 12 or more Indigo Series packaging-centric digital presses of HP, Inc.

(Source: Kodak.com)

Kodak should focus more on the print packaging business. This niche market accounts for the biggest slice of the $400.46 billion global printing business. As per the experts at Markets and Markets, the global packaging industry was worth $352.1 billion in 2020. This valuation is expected to become $433.4 billion by 2025. The ongoing pandemic is not going to slow down print packaging. Food and non-food manufacturers need printed packaging to promote their brands. Printed packaging builds loyalty from buyers and consumers.

My fearless forecast is that Kodak can generate an additional $200 million/year if it expands its footprint in the packaging industry. Making and selling more packaging-centric printers leads to increase sales of Kodak’s patented Nextfinity dry inks and VERSAMARK inkjet inks.

I checked the balance sheet.  Kodak has enough idle cash reserves it can use to market home/office dry ink printers for the home and office. Kodak can just hire Chinese contract manufacturers to build Kodak-branded dry ink printers as an alternative to laser and inkjet printers. There is a far greater market opportunity in home/office printers. Kodak needs to mature beyond its popular dry ink photo printers.

(Source: Kodak)

Instead of meddling in pharmaceuticals, Kodak has a brighter future if it can market a multi-function dry ink printer for home and office use. The global multi-function printer industry was worth $27.5 billion in 2017 and it is expected to grow to $34 billion by 2023.

KODK Stock Forecast: Kodak Is A Small But Important Player In The Internet Of Things

Kodak should forget about making pharmaceuticals components. It does not have the expertise nor extra capital to waste on researching medicine-related products. Kodak has zero chance of formulating a COVID-19 cure or vaccine. Management should just improve its existing chemical products that are related to fast-growing industries. Kodak’s EKTAFLEX Functional printing solutions are very promising. This is something that HP Inc. or Canon (CAJ) are not yet offering. Kodak get enrich itself if it properly markets EKTAFLEX to be the go-to choice for printing flexible electronic boards & components. EKTAFLEX is important in the manufacture of Internet of Things (IoT) gadgets and appliances. Fortune Business Insights estimates that the overall Internet of Things industry (hardware and software) industry is growing at a CAGR of 24.9%. It will be worth $1.463 trillion by 2027.

EKTAFLEX and other Kodak proprietary chemical products are why I’m bullish on its stock. EKTAFLEX makes Kodak an important player in the fast-growing IoT industry. I hope the next management team of Kodak will focus more on the Internet of Things, rather than on getting caught doing illegal insider trades of KODK.

(Source: Kodak)

Conclusion

Investing in a falling knife stock like Eastman Kodak is risky. Heed my buy recommendation only if you have the extra cash. I hope my explanation that Kodak is a printing company that has a footprint in the Internet of Things electronics components is enough to dispel your fears/doubts. Investing is taking risks to gain rewards. It is not often but sometimes the bold wins big from taking high-risk bets.

If you can think beyond Kodak’s meme stock reputation, you will agree that it is a safe, long-term printing-centric company. Kodak is in league with the bigwigs of the printing industry. They are all bargain stocks.

(Source: Seeking Alpha)

Lastly, we are going to go long on KODK because there’s a big chance that the big 3 of printing (Canon, HP, and Epson) might just buy Kodak. KODK’s market cap is less than $600 million. That’s just pocket change for those three giants.

Past Success With KODK Stock Forecast

I Know First has been bullish on the KODK stock forecast in the past. On September 13th, 2020 the I Know First algorithm issued a forecast for KODK stock price and recommended KODK as one of the best consumer stocks to buy. The AI-driven KODK stock prediction was successful on a 3-months time horizon resulting in more than 51.41%.

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