NCR's (NCR) POS Innovation, Cost Savings to Businesses Bode Well for Growth - Barron's
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ATM giant NCR Corp. (NYSE: NCR) is getting a little investor love Monday following Barron's making a strong case for the Company over the weekend.
Aside from ATMs, NCR is also a leader in point-of-sale (POS) equipment, self-service kiosks in airports, and other touch-screen devices used in the operations of such businesses as hotels, restaurants, and more. Though an initial outlay is required to purchase equipment from NCR, Barron's says the company will continue to enjoy strong sales as businesses realize the relatively quick payback each machine offers.
If you don't have automatic deposit for your work check, you may not have experienced the new feature of inserting the check directly and having an ATM scan the check, get the information correct, and offer a printed copy when you're done. That's a huge innovation that is making ATMs more convenient to use, all while positioning NCR as a leader in the banking ATM segment. NCR gets about half its annual revenues from banks, according to financial statements.
NCR splits the U.S. ATM market with Diebold (NYSE: DBD), and has similar status in emerging markets like China and Brazil, as well as mature markets like Germany and the rest of Europe.
Looking at potential in the U.S., you have NCR with about 50,000 ATMs with major banks. However, following the credit crunch of 2008, regional banks have been hesitant to splurge on the new technology. Should motivation come back, that's a market of about 175,000 machines, or a $3 billion opportunity, notes Barron's.
Otherwise, NCR has a good presence in automated telephone banking, which also has seen slower adaptation among the smaller players.
For emerging markets like China and India, there's lots of opportunity as well. Current data has about 1,500 ATMs per million people in the U.S,, with just 100 per million in China and 50 per million in India. With both those markets continuing to grow and create a stronger middle class, look for NCR's already established presence to pay dividends.
Like the self-scan lane at the grocery store? NCR is there, too. Barron's points out how each self-scan machine can replace up to four workers, a huge savings in an already tight industry.
In terms of where the stock could go, one RBC analyst sees NCR hitting $28 over the next year. However, with EPS expected to be $3.95 by 2015 and a historical multiple of 15 times in the books, NCR could see its shares hit $59. Excluding about $1.3 billion in pension costs and you're still looking at $51, according to Barron's data. Though NCR's market cap is 59 percent richer than peer Diebold, its P/E at 9 times is lower than Diebold's 13 times valuation.
Shares are 4.6 percent better in midday trading.
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Aside from ATMs, NCR is also a leader in point-of-sale (POS) equipment, self-service kiosks in airports, and other touch-screen devices used in the operations of such businesses as hotels, restaurants, and more. Though an initial outlay is required to purchase equipment from NCR, Barron's says the company will continue to enjoy strong sales as businesses realize the relatively quick payback each machine offers.
If you don't have automatic deposit for your work check, you may not have experienced the new feature of inserting the check directly and having an ATM scan the check, get the information correct, and offer a printed copy when you're done. That's a huge innovation that is making ATMs more convenient to use, all while positioning NCR as a leader in the banking ATM segment. NCR gets about half its annual revenues from banks, according to financial statements.
NCR splits the U.S. ATM market with Diebold (NYSE: DBD), and has similar status in emerging markets like China and Brazil, as well as mature markets like Germany and the rest of Europe.
Looking at potential in the U.S., you have NCR with about 50,000 ATMs with major banks. However, following the credit crunch of 2008, regional banks have been hesitant to splurge on the new technology. Should motivation come back, that's a market of about 175,000 machines, or a $3 billion opportunity, notes Barron's.
Otherwise, NCR has a good presence in automated telephone banking, which also has seen slower adaptation among the smaller players.
For emerging markets like China and India, there's lots of opportunity as well. Current data has about 1,500 ATMs per million people in the U.S,, with just 100 per million in China and 50 per million in India. With both those markets continuing to grow and create a stronger middle class, look for NCR's already established presence to pay dividends.
Like the self-scan lane at the grocery store? NCR is there, too. Barron's points out how each self-scan machine can replace up to four workers, a huge savings in an already tight industry.
In terms of where the stock could go, one RBC analyst sees NCR hitting $28 over the next year. However, with EPS expected to be $3.95 by 2015 and a historical multiple of 15 times in the books, NCR could see its shares hit $59. Excluding about $1.3 billion in pension costs and you're still looking at $51, according to Barron's data. Though NCR's market cap is 59 percent richer than peer Diebold, its P/E at 9 times is lower than Diebold's 13 times valuation.
Shares are 4.6 percent better in midday trading.
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