UPDATE: Sterne Agee Raises Target on Rent-A-Center to $42

Sterne Agee maintains its Buy rating on Rent-A-Center RCII and raises its price target to $42, up $2, as company expects upside in 4Q based on preview. Sterne Agee says, "We believe RCII's 4Q results could surprise on the upside relative to consensus and we expect 2012 guidance to be reaffirmed. We are reiterating our Buy rating and raising our 12-month target price from $40 to $42, which is based on less than 12x our CY13 EPS estimate of $3.60. Potential catalysts include: continued growth (and upside potential) in RAC Acceptance, potential RAC Acceptance partnership with Best Buy, international growth opportunity, ongoing stock buybacks and dividend increase." RCII closed at $37.27 a share