Stock of Lenovo Group Ltd, the world's No. 3 maker of personal computers, may be overpriced when compared with its peers Hewlett-Packard and Dell , Barron's said on Sunday.
Lenovo bought IBM's personal computer business in December 2004 and reported a sharp rise in its first-quarter profit in June, helped by cost cuts and higher sales, Barron's said in an article in its August 13 edition.
But Lenovo trades at 34 times earnings and 5 times book compared to HP, which trades at 19 times earnings and 3.5 times book, and Dell, which trades at 24 times earnings, Barron's said.
I frankly think (Lenovo) is overpriced, said Bob Djurdjevic of Annex Research in the article.
Lenovo said last week it was in exclusive talks to buy PC maker Packard Bell.
One of a handful of Chinese companies trying to forge a global brand by investing abroad, it dropped to fourth globally in the first three months of 2007 but reclaimed the No. 3 spot from Acer a quarter later, riding an uptick of corporate demand.
Shares of Lenovo closed down 4.6 percent Friday at HK$4.50.
(Reporting by Sarah Coffey)