Piper Jaffray Downgrades VeriFone (PAY) to Neutral
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Piper Jaffray downgraded VeriFone (NYSE: PAY) from Overweight to Neutral with a price target of $19.00 (from $27.00).
Analyst Jason Deleeuw commented, "PAY significantly cut FY ’16 guidance and now expects revenue to decline 3% in FY ’17 due to 1) a slowdown in U.S. EMV upgrades from SMB merchants and 2) macro/ political headwinds in Latin America & Turkey. PAY reported U.S. SMB merchants having less urgency to upgrade their POS terminals for EMV following the new chargeback moratorium rules. Also, there continues to be a back-up of POS terminal upgrades as merchant processors and some large merchants deal with the complexity of EMV. We downgrade PAY from OW to Neutral as we no longer expect a meaningful recovery in North America and do not see a return to total company growth until beyond FY ’17, which we believe will limit valuation multiple expansion potential. Our PT moves from $27 to $19."
The firm cut FY 2016 EPS from $1.85 to $1.65 and FY 2017 EPS from $2.24 to $1.55.
Shares of VeriFone closed at $20.10 yesterday.
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