Conn's (CONN) Risk/Reward Remains Compelling, Piper Jaffray Says

Piper Jaffray analyst Peter Keith reiterated an Overweight rating and $45 price target on Conn's Inc. (NASDAQ: CONN) after providing updated thoughts on the portfolio sale process. The analyst said risk/reward remains compelling.

Keith commented, "We believe risk/reward on CONN shares remains very compelling to the upside, even with putting the odds of a portfolio sale at 50/50. We continue to believe some type of portfolio sale remains probable even though CONN is likely closer to the back-end of its stated time frame to complete a deal. "

He added, "We believe a multitude of positive reasons could push negotiations beyond the stated "early Q3" targeted end date. Bluestem Group (BGRP) took nearly a year to negotiate its loan sale arrangement to Santander (SC), and has just recently modified is exclusive arrangement with SC in order to purse add'l buyers. Absent a loan portfolio sale, we see downside risk to $30 given current valuation, ongoing portfolio stabilization, and substantial EPS power for CY16E. Finally, CONN continues to look sufficiently reserved for a high rate of charge-offs, and compares on monthly delinquencies get substantially easier over the coming months."

For an analyst ratings summary and ratings history on Conn's Inc. click here. For more ratings news on Conn's Inc. click here.

Shares of Conn's Inc. closed at $35.36 yesterday.

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