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UPDATE: Compass Point Downgrades Cardtronics to Neutral, Reiterates $31 PT

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In a report published Wednesday, Compass Point downgraded its rating on Cardtronics (NASDAQ: CATM) from Buy to Neutral, and reiterated its $31.00 price target.

Compass Point noted, “Following 2Q12 we are downgrading our rating from Buy to Neutral. Our revised estimates are $1.63 this year ($1.68 previously) and $1.94 next year ($2.00 previously). Our $31 price target is unchanged. 2Q was as expected with Adjusted EPS of $0.38 and our downgrade is unrelated to the quarter. We continue to see value in the company's differentiated business model given that banks are struggling to operate off site ATMs at break even while Cardtronics does so at a profit. And market share whether defined in units or transactions has room for growth. Our updated investment thesis continues to expect the income statement to produce earnings growth. But at 19x this year's and 16x next year's EPS we view our existing valuation as fair considering the balance sheet where debt/equity resides at +3x and the cash flow statement where free cash flow relative to enterprise value is poor. Our $31 price target equals 19x this year's EPS and 16x next year's EPS.”

Cardtronics closed on Tuesday at $31.01.

Posted-In: Compass Point Research & TradingAnalyst Color Downgrades Analyst Ratings

 

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