UPDATE: Compass Point Downgrades NCR Corporation Following Quarter's Weak Revenue Performance
In a report published Friday, Compass Point analyst Douglas Greiner downgraded the rating on NCR Corporation (NYSE: NCR) from Buy to Neutral, and lowered the price target from $47.00 to $40.00.
In the report, Compass Point noted, “Downgrading to Neutral. Lowering estimates. Lowering price target. We see reason to pause on this quarter's weak revenue performance. We had upgraded NCR to Buy on April 17th at $27.16 for a total return of 49% versus the S&P 500 return of 10% over the comparable period. While NCR reported a better than expected third quarter in terms of earnings, management left the full year earnings outlook unchanged suggesting concerns about fourth quarter growth. We find this outlook particularly concerning given that revenue missed our estimate this quarter. As reflected in our updated estimates, lackluster revenue growth presents risk that the business meaningfully underperforms management's 2015 targets of $7.5 billion in revenue and $3.65-$4.25 in Adjusted EPS. With an already debt heavy balance sheet and only meager free cash flow production, the implications of lost earnings momentum would be significant.”
NCR Corporation closed on Thursday at $40.53.
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