Nomura Goes Against the Grain; Upgrades DFC Global Corp (DLLR) to Buy

April 2, 2013 9:10 AM EDT
Get Alerts DLLR Hot Sheet
Price: $9.51 --0%

Rating Summary:
    4 Buy, 8 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 18 | Down: 11 | New: 19
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Nomura Securities upgraded DFC Global Corp (NASDAQ: DLLR) from Neutral to Buy with a price target of $16.00 (from $20.00), citing an attractive risk/reward after yesterday's sell-off on the Q3 pre-announcement.

"We are upgrading DLLR to Buy (from Neutral) based on what we view as an attractive risk/reward at current valuation levels," analyst Bill Carcache states. "Our SOTP analysis suggests that the market is currently ascribing $0 value to the UK Payday business. We view this outlook as overly draconian, and expect shares to rebound as we move beyond the current disruptive period in the UK market. We believe DLLR is taking a prudent, LT approach by ensuring compliance with regulatory standards and is well positioned to navigate a dynamic and rapidly changing environment. We are lowering our 2013/14 estimates to reflect higher loss rate and lower origination expectations. Our revised $16 PT is based on a 4x forward EPS multiple for the UK payday business (7.4x multiple for overall business)."

The firm cut FY13E EPS from $2.45 to $1.76; FY14E EPS from $2.90 to $2.58.

For an analyst ratings summary and ratings history on DFC Global Corp click here. For more ratings news on DFC Global Corp click here.

Shares of DFC Global Corp closed at $13.04 yesterday.


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