Compass Point Downgrades VeriFone (PAY) to Neutral

April 19, 2013 7:18 AM EDT
Get Alerts PAY Hot Sheet
Price: $18.24 -0.27%

Rating Summary:
    11 Buy, 17 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 24 | Down: 17 | New: 14
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Compass Point downgraded VeriFone (NYSE: PAY) from Buy to Neutral with a price target of $20.00 (from $25.00).

The firm comments, "We tactically upgraded our rating from Neutral to Buy on February 21st when the shares were down more than 50% following the pre-release of materially weak 1Q'FY13 earnings results. Thereafter, management defended that the business could be fixed in a matter of months not years. Subsequently, the company announced that veteran CEO Douglas Bergeron was stepping down in order to advance the turnaround efforts. However, despite these positive events, yesterday's closing price of $19.86 is frustrating as it is lower than the $20.50 level of our upgrade. The lack of investor demand reflects lingering near-term concerns that warrant caution heading into the upcoming quarter. We see significant downside risk in the event of any negative surprise. Consequently, we prefer to be conservatively postured heading into earnings and downgrade our rating from Buy to Neutral. Our updated $20 price target ($25 previously) reflects 10.2x our forecast of 2013 adjusted EPS."

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

Shares of VeriFone closed at $19.86 yesterday.

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