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UPDATE: Compass Point Reiterates NCR Corporation to Buy Following Retalix Acquisition

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Compass Point maintained its Buy rating and $30 price target on NCR Corporation (NYSE: NCR) following an accretive, though expensive, expansion of retail footprint.

Compass Point noted, "Our estimates are unchanged this year and revised to $2.60 next year (+3 cents from $2.57 previously). The company is taking large steps to drive growth - that are not cheap. The acquisition of Retalix was priced at 17x forward EBITDA. The good news is that the price tag is lower than the Radiant deal completed at 18x forward EBITDA. In combination, both deals have resulted in the addition of significant debt to the balance sheet. With rates where they are, the use of leverage is manageable. And if the deals produce healthy cash flow, then there should be future capacity to de-leverage. Nonetheless, we admit that the strategy is aggressive. In summary, the company continues to move towards the 2015 free cash flow target of $400-$500 million."

NCR Corporation closed at $23.75 on Wednesday.

Latest Ratings for NCR

Oct 2017Morgan StanleyMaintainsEqual-Weight
Jul 2017Compass PointInitiates Coverage OnBuy
Apr 2017BenchmarkInitiates Coverage OnBuy

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Posted-In: Compass PointAnalyst Color Reiteration Pre-Market Outlook Analyst Ratings


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