Green Dot (GDOT) from Cloudy to Cloudy - Nomura

November 2, 2012 11:04 AM EDT Send to a Friend
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Price: $15.85 --0%

Rating Summary:
    8 Buy, 20 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 9 | Down: 10 | New: 5
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Nomura Securities used Green Dot (NYSE: GDOT) latest Q3 report as an opportunity to cut its price target and estimates further.

The price target goes from $15 to $13, while FY13E EPS from $2.18 to $1.51. The Neutral rating was maintained.

While Green Dot beat Q3 views - posting adj-EPS of $0.29 versus the consensus of $0.23 - the beat was driven by higher-than-expected card and cash transfer revenues, partially offset by higher-than-expected operating expenses, the firm notes. "After surprising the investment community last quarter with sharply lower earnings guidance, the company was able to cross a relatively low bar in 3Q," analyst Bill Carcache notes.

Carcache remain cautious on GDOT despite the massive pullback in the shares.

"We are lowering our price target to reflect a shift in our focus from an unclear 2013 to a clearer 2012, given the uncertainty that lies ahead. In our view, GDOT's earnings trajectory is clouded; we are concerned that 2013 may in fact be another "investment year" and that expectations may prove to be too lofty. With three quarters of 2012 now behind us, we are comfortable that the company can achieve ~$1.32 this year."

For an analyst ratings summary and ratings history on Green Dot click here. For more ratings news on Green Dot click here.

Shares of Green Dot closed at $10.50 yesterday.

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