Wedbush Morgan Downgrades VeriFone (PAY) to Underperform; Lowers 2010 Estimates

October 5, 2009 10:45 AM EDT

Wedbush Morgan downgrades VeriFone (NYSE: PAY) from Neutral to Underperform. Price target $12.

Wedbush analyst says, "We are downgrading VeriFone to Underperform, as we believe VeriFone’s current valuation reflects overly optimistic expectations. We believe that US market share losses are likely, which could lead to further global share losses, that FY09 FCF and FY10 earnings may represent short-term peak levels, and that component shortages may cap short-term growth potential...We believe that VeriFone’s dominance of the U.S. terminal market leaves it open to more share losses. We believe that VeriFone is likely to lose share at key customers such as Heartland (NYSE: HPY) and First Data (NYSE: FDC) as its confrontational relationships increase the opportunity for both Hypercom (NYSE: HYC) and Ingenico. We believe these losses may not only translate to slower growth, but also to more limited pricing power...Lowering FY10 EPS estimates to $1.05 from $1.20, to reflect expectations for a reversal of operating leverage, and expect this to be a short term peak in reported earnings."

To see more analyst ratings on PAY Click Here.

VeriFone Holdings, Inc. designs, markets, and services electronic payment solutions that enable secure electronic payments among consumers, merchants, and financial institutions.

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