Topeka Intiates Coverage On Visa, Verifone

Topeka issued reports Tuesday on Financial Technology, initiating coverage on Visa Inc V and Verifone Systems Inc PAY.

Analyst John T. Williams rated Visa a Hold with a $261 price target.

Williams noted that Visa “remains the industry leader in terms of footprint and market share, and offers an attractive mix of growth, defense, high incremental margins, and secular tailwinds that investors find compelling."

“We expect low teens revenue growth and high-teens EPS growth over the next three years. For 1Q 2015, we expect both revenue and EPS to be 1 percent above consensus.”

Verifone was rated a Buy with a $43 price target.  

Williams observed that as Verifone transforms “from a hardware-centric to a services-centric model, we believe a combination of favorable secular exposure (cash/card, US EMV), market share normalization (PAY is recapturing share of new sales previously lost to competitors), strong competitive positioning (POS terminal business is a duopoly), and improved operational oversight and controls (new management, expense cuts, debt paydown) will drive estimate upside over the next 12-18 months."

“Further, we view PAY as a very attractive asset and prime acquisition candidate in the rapidly expanding (and always consolidating) payments space.”

Verifone Systems closed at $37.04, down 0.11 percent.

Visa closed at $249.73, down 0.19 percent.