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Here's What Wall Street Is Saying About Blackhawk Network's Earnings

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Blackhawk Network Holdings Inc (NASDAQ: HAWK) gained 5 percent on Friday after the company reported fourth-quarter earnings.

Following the earnings call, several Wall Street research firms weighed in:

Citi reiterated a Buy rating and $42 price target, despite saying that fourth quarter "results and 2015 guidance was decidedly messy, with many moving parts (accounting changes, new tax items, revised metrics) that clouded what seemed to be a mostly in-line holiday performance and a slightly weaker-than-expected outlook."

Nonetheless, Citi believes that Blackhawk Network should "still post solid organic revenue growth and the company is likely to achieve synergies from recent M&A and pursue new deals that will likely add to numbers."

Deutsche Bank also reiterated a Buy rating, accompanied by a $44 price target. The firm raised its fiscal 2015 and fiscal 2016 EPS by $0.06 and $0.03, respectively, to $2.14 and $2.45.

A report published Friday highlighted a few points after the financial results: (1) "higher D&A, interest expense and share count" impacted on core growth; (2) "Despite solid momentum in the core business, F/X and one-time benefits in FY14 will weigh on Intl revenue growth in FY15;" (3) Four key growth pillars position Blackhawk to execute on strategy, "namely core gift card distribution in the US (double digit growth expected to continue), underpenetrated prepaid in International (70% y/y TDV growth in FY14), ongoing shift to prepaid for incentives and consolidate on opportunity given fragmented market, and new channels/applications for prepaid in digital."

Wedbush reiterated a Neutral, but raised its price target from $27 to $34, as it rolled the multiple to 2016. However, the analysts note that they "expect the mix shift to less profitable categories to reduce profit growth leading to eventual negative terminal growth once mobile gifting and stored value replace physical gift cards."

The firm emphasizes the fact that "acquisitions have failed to meet expectations creating further drag on organic growth and margins."

Posted-In: Citi Deutsche Bank WedbushAnalyst Color Price Target Reiteration Analyst Ratings

 

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