Jefferies Bumps Est./PT on Green Dot (GDOT); Examines Wal-Mart Deal
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Price: $8.51 +1.07%
Rating Summary:
4 Buy, 25 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
Rating Summary:
4 Buy, 25 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
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Jefferies bumped its price target on Green Dot (NYSE: GDOT) from $12 to $14 after examining the evolving relationship between the company and Wal-Mart (NYSE: WMT), which makes up 65% of the company's revenue. The firm maintained a Hold rating on longer-term overhangs.
The report addresses 4 tough questions asked by investors about GDOT: : 1) What if the F13 Bluebird net revs impact comes in better/worse than projected? 2) What if WMT cuts consumer prices on the GDOT MoneyCard? 3) What will it cost GDOT to renew the WMT contract in 2015? and 4) What happens if GDOT loses the WMT contract altogether in 2015 (unlikely, we believe)?
Jefferies said Bluebird impact is key to F13 share performance, and it may come in lighter than expected.
"Our analysis validates our view that GDOT's F13 earnings performance largely hinges on whether the Bluebird impact comes in better or worse than expected in F13. Our own opinion is that the long revenue tail from existing WMT MoneyCard cardholders may soften the impact of Bluebird in F13, making GDOT's estimated -$50M Bluebird impact a reasonable, if not modestly conservative, projection.
The firm raised estimates and PT because they see this potentially lighter-than-expected Bluebird impact driving upside to Street numbers in F13.
FY13 EPS goes from $1.10 to $1.18 and FY14 from $1.23 to $1.25.
For an analyst ratings summary and ratings history on Green Dot click here. For more ratings news on Green Dot click here.
Shares of Green Dot closed at $14.78 yesterday.
The report addresses 4 tough questions asked by investors about GDOT: : 1) What if the F13 Bluebird net revs impact comes in better/worse than projected? 2) What if WMT cuts consumer prices on the GDOT MoneyCard? 3) What will it cost GDOT to renew the WMT contract in 2015? and 4) What happens if GDOT loses the WMT contract altogether in 2015 (unlikely, we believe)?
Jefferies said Bluebird impact is key to F13 share performance, and it may come in lighter than expected.
"Our analysis validates our view that GDOT's F13 earnings performance largely hinges on whether the Bluebird impact comes in better or worse than expected in F13. Our own opinion is that the long revenue tail from existing WMT MoneyCard cardholders may soften the impact of Bluebird in F13, making GDOT's estimated -$50M Bluebird impact a reasonable, if not modestly conservative, projection.
The firm raised estimates and PT because they see this potentially lighter-than-expected Bluebird impact driving upside to Street numbers in F13.
FY13 EPS goes from $1.10 to $1.18 and FY14 from $1.23 to $1.25.
For an analyst ratings summary and ratings history on Green Dot click here. For more ratings news on Green Dot click here.
Shares of Green Dot closed at $14.78 yesterday.
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