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ATM Market & NCR 2015 Preview: 'Currency And European Market To Drive Declines,' Wedbush Says

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In a report issued Sunday, Wedbush analysts Gil Luria and Aaron Turner previewed the automated teller machines (ATM) market for 2015.

They expect to see the ATM market "decline by 4 percent in U.S. dollar terms" (despite delivering a 4 percent growth in local currency), as a strengthening dollar could drive declines of 20 to 25 percent in Europe. According to the note, "Wincor's negative preannouncement on Friday indicates the European market may decline beyond the weakening Euro."

Within the industry, the analysts look into NCR CorporationM (NYSE: NCR), which the analysts think "can achieve low-single-digit organic revenue growth and mid-single-digit earnings growth going forward." However, "the latest currency declines and market trends will lead to further reduction in estimates."

In this occasion, Wedbush trimmed its 2015 and 2016 EPS estimates from $2.71 to $2.63, and from $2.86 to $2.78, respectively, on the back of the aforementioned weakness in the European market and the strengthening U.S. dollar. Revenue estimates were also cut for 2015 and 2016, from $6.601 billion to $6.433 billion, and from $6.859 billion to $6.686 billion, correspondingly.

The firm believes "shares have ascended in anticipation of corporate action, based on high-profile activist investors." Nonetheless, "the available corporate action is unlikely to generate the value to justify such appreciation (…) [and] believe a sale of the software businesses will generate less value than the current share price. Other types of corporate changes could result in further reductions in EPS guidance closer to the company's much lower FCF/share."

Wedbush reiterated a Neutral rating and a $22 price target on NCR shares.

Latest Ratings for NCR

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

View More Analyst Ratings for NCR
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Posted-In: Aaron Turner ATM Gil Luria WedbushAnalyst Color Eurozone Reiteration Analyst Ratings


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