VeriFone's (PAY) New Managment / Strategies Can't Reverse Secular Decline, DB Reiterates Sell

In April of last year, analyst at Deutsche Bank downgraded VeriFone (NYSE: PAY) to Sell in part because of secular concerns related to risk from mobile payments and mPOS devices. Since then the company has made changes to management and increased efforts to optimize operations. While these efforts are seen as positives, they will not reverse secular trends, in the view of analysts.

"With numerous competitors entering the payment sector (either bypassing hardware or giving it away for free), we believe market share losses, pricing pressure, and extended upgrade cycles, will all causing significant challenges to PAY regardless of the management change," said analyst Bryan Keane.

"Additionally, we are seeing growth of mobile POS devices like iPhones/tablets and dongles, likely further hampering PAY's growth opportunities (especially in emerging markets),” added Keane.

He thinks the stock looks expensive relative to other hardware/ payment vendors and doesn't see a quick fix to growth issues.

Deutsche Bank reiterated a Sell rating on VeriFone (NYSE: PAY) with a price target of $15.00.

For an analyst ratings summary and ratings history on VeriFone (NYSE: PAY) click here. For more ratings news on VeriFone click here.

Shares of VeriFone closed at $20.86 yesterday.

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