Oppenheimer Believes JKHY Has Strong Near-Term Earnings Visibility
Analysts at Oppenheimer & Co reiterate their "perform" rating on Jack Henry (NASDAQ: JKHY), while reducing their estimates for the company.
According to Oppenheimer & Co, “Integration of Pemco, Goldleaf and iPay remain on plan and management reiterated the expected earnings accretion from Pemco and Goldleaf at an incremental ~$0.06 to EPS in FY11; iPay is expected to be neutral to slightly accretive to EPS. Collectively, the acquisitions should contribute $165M to revenue (17% of total) in FY11.”
“JKHY reported 4Q:FY10 EPS of $0.35, which was in line with our/Street estimate….JKHY is likely to face a continued challenging discretionary spending environment over the near term although the sales environment could loosen during FY11. However, JKHY saw notable strength in its recurring transaction/services offerings during 4Q10,” the analysts mention.
Oppenheimer adds, “We believe JKHY has strong near-term earnings visibility, and anticipate an improved spending climate in FY11. JKHY trades in line with peers on an EBITDA basis, which is reasonable, although the group is trading at cyclically depressed levels, in our view.”
Oppenheimer has lowered its EPS estimates for 2011 from $1.49 to $1.44.
