Compass Point Upgrades MoneyGram International (MGI) to Buy

October 4, 2013 6:42 AM EDT Send to a Friend
Get Alerts MGI Hot Sheet
Price: $8.51 +0.12%

Rating Summary:
    8 Buy, 8 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 11 | Down: 45 | New: 12
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Compass Point upgraded MoneyGram International (NASDAQ: MGI) from Neutral to Buy with a price target of $23 as takeover talks taper off.

Analyst Douglas Greiner weighs in: "This week various news sources cited that takeover talks have tapered due to price. When the takeover news originally broke at the beginning of the summer the shares traded from under $19 up to $23. In our view, the pullback to under $19 is a buying opportunity. In summary, investors at today's prices have 3 ways to win -- (1) improving underlying performance, (2) multiple expansion, and/or (3) a takeout. We expect substantial EPS and EBITDA growth through 2015 driven by an improving end market, market share gains, and interest expense savings. MGI currently trades at a discount to WU in terms of EV/EBITDA despite that MGI's top line is growing high single digits versus low single digits at WU. Longer term a sale still remains plausible given that it would provide a smooth exit for private equity interests."

For an analyst ratings summary and ratings history on MoneyGram International click here. For more ratings news on MoneyGram International click here.

Shares of MoneyGram International closed at $18.42 yesterday.

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