UPDATE: Diebold (DBD) Raised to 'Overweight' at JPMorgan on Valuation; Pull-Back Tied to 'Forced Selling', Says Analsyt

September 26, 2016 6:42 AM EDT
Get Alerts DBD Hot Sheet
Price: $25.53 +1.51%

Rating Summary:
    6 Buy, 3 Hold, 2 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 29 | Down: 29 | New: 23
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(Updated - September 26, 2016 9:56 AM EDT)

JPMorgan upgraded Diebold (NYSE: DBD) from Neutral to Overweight with a price target of $33, implying upside of 34%. Analyst Paul Coster sees compelling valuation, and he said a pullback in shares could be related to "forced selling."

"A 13% decline in DBD stock over the last month (S&P500 down 1%) may have been triggered by the pending cut to the dividend and sale of US-listed DBD shares by European investors, yielding an opportunity to buy this stock at an attractive multiple that offsets the near-term tail-risks associated with acquisition of Wincor Nixdorf. By the February 2017 analyst day, noise associated with the acquisition should dissipate and investors should gain a clearer line of sight to the $160 million synergy target, debt deleveraging potential, and earnings power. Inbound call activity has been elevated, suggesting to us that long-inclined investors are looking for an entry-point here," said Coster.

Commenting further on the recent pull-back in shares, the analyst said, "DBD, down ~13% in the last month, has under-performed the market (down 1%) and near-peer NCR (down ~6%), spurring inbound queries from clients. We believe much of the underperformance can be attributed to forced-selling by some dividend investors (ahead of the signaled 2/3rds reduction to the dividend) and by European investors that received US-listed DBD shares on August 16th. To the extent we are correct, and that forced selling abates, we believe the stock is poised to recover."

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

Shares of Diebold closed at $24.49 yesterday.

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