UPDATE: Compass Point Upgrades MICROS Systems to Buy; Shares Discount Fundamentals
Compass Point raised its rating on MICROS Systems (NASDAQ: MCRS) from Neutral to Buy with a reiterated $50 price target.
Compass Point said, "In May the shares traded around $58. Yesterday the shares closed near $43. That's down about 26%, albeit from a lofty valuation. The current price is now barely above the 52 week low of $42.95. In our view, the pullback is related to near-term issues and represents a disconnect from long-term fundamentals. Specifically, today's price appears to reflect the modest +1.4% organic revenue growth reported in 1Q'FY'13 related to (1) uncertainty surrounding the election, (2) reduced growth rates in EMEA, and (3) the effect of the Olympics in the UK - all of which are not recurring - in addition to other factors like the Fiscal Cliff rather than on the potential earnings power of management's FY'16 $2 billion revenue target. Accordingly, we now recommend the shares."
MICROS Systems closed at $43.15 on Wednesday.
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