UPDATE: Citigroup Upgrades Vantiv to Buy on Attractive Valuation

Citigroup raised its rating on Vantiv

from Neutral to Buy while reiterating a $24 price target. Citigroup noted, "We are upgrading because (we believe) misplaced disintermediation fears have made VNTV valuation attractive. This is a name we believe should trade at a premium to its comps based on its superior growth (10%+ top line and ~15% bottom line) and margin profile (~50% EBITDA margins) but now trades at a discount. Since we initiated on VNTV with a Neutral rating primarily citing valuation, the stock is down ~10% while estimates have actually risen ~2%. In relative terms, due to VNTV's underperformance, it trades at a 14.9x P/E multiple (comps 15.7x multiple). More analysis on the disintermediation question appears inside, but once we look at this analysis and separate the facts from the fears, it seems like too good an opportunity to pass up." Vantiv closed at $20.11 on Friday.