JPM: Cash America International Inc Fully Valued Post Spin Off

Cash America International Inc.

is fully valued after its recent spin-off of sub-prime lender Enova International Inc.

, an analyst said Monday. JMP's David Scharf downgraded Cash America to Market Perform, from Out Perform, saying likely earnings growth at the Fort Worth, Texas pawnbroker's stand-alone retail business doesn't support its current share price. Cash America, which retains a 20 percent stake in Chicago-based Enova after the Nov. 13 spin off, traded recently at $24.75, down 1.8 percent. Enova is off 17 percent since trading began. On Monday, Enova fell 1 percent, changing hands recently at $23.17. Scharf said factoring in Cash America's 20 percent stake in Enova "remains a wild card," adding that his earlier Out Perform rating had included improving results from both the pawn shop business as well as the Enova unit, which operates exclusively on line. Scharf noted that Street estimates of Cash America's future earnings are near or above the range offered recently by the company. That "allows little room for error" for a stock with a relatively high ratio of price to earnings, Scharf said. Cash America has noted that consumer advocacy groups as well as federal and state legislators have recently suggested tightening rules "so as to severely limit, if not eliminate" so-called payday and other high-interest loan products offered by pawnbrokers and online lenders. https://www.sec.gov/Archives/edgar/data/807884/000119312514078968/d681985d10k.htm#toc681985_3