Jefferies has started coverage of Enova International Inc ENVA with a Buy rating and price target of $12, implying a potential upside of 25 percent over recent close.
Chicago, Illinois-based Enova is a leading provider of online financial services firm consumer loan products as well as small business loans. These products span seven distinct brands and several countries internationally, with a large addressable global market of more than $300 billion.
"We believe that Enova is an innovator and a leader in the large, fragmented market for alternative consumer lending, and that there is meaningful upside from current stock price levels," analyst John Hecht wrote in a note.
Hecht noted Enova's dealing of both regulatory framework and economic situations would separate the company from other emerging lenders over time. For instance, Enova has successfully navigated a period of regulatory reform in the U.K., and now generating profits with volumes growing 33 percent year-over-year.
In the United States, the analyst said the company is uniquely positioned to navigate the likely regulatory reforms in the country —which accounts for 78 percent of revenues.
"[W]e assess that the potential impact of the proposed US regulatory framework is tolerable, even under current valuation multiples and forecasting scenarios," Hecht highlighted.
The company is currently trading at a "very attractive" 6.0x CY18 P/E, and "an appealing" 8x CY18 P/E even when accounting for regulatory reform and clarity.
Hecht projects EPS of $1.08 for 2016 and $1.35 for 2017 versus consensus estimates of $1.09 and $1.27, respectively.
At time of writing, shares of Enova rose 5.01 percent to $10.07.
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