UPDATE: Deutsche Bank Lowers PT to $27 on VerFone Systems on Weak Guidance and Results

Deutsche Bank reduced its rating on VeriFone Systems

from $30 to $27 while reiterating a Sell rating on shares. Deutsche Bank commented, "PAY reported 3Q12 non-GAAP revenues of $493m, below our estimate of $503m, and pro forma EPS of $0.75, ahead of our $0.71 estimate mostly due to a lower tax rate. Pro forma organic growth of 6% (includes acquisitions) was below our 8% estimate due to a fire slowing production in Brazil, the absence of a software feature, and weakness in Europe. PAY surprisingly guided 4Q12 and FY13 revenues below Street estimates, with more questions arising about sustainability of FCF. Due to weak fundamentals, we are cutting our TP to $27 from $30, which would still be a robust 21x our CY13 EV/FCF estimate, and reiterating our Sell rating." VeriFone Systems closed at $35.38 on Wednesday.