While NCR Corporation’s NCR stock appears “attractively valued,” JPMorgan projects limited upside in the next six to 12 months, with only a gradual mix-shift toward software and SaaS.
The Analyst
JPMorgan’s Paul Coster downgraded NCR from Overweight to Neutral with an unchanged $32 price target.
The Thesis
Limited catalysts exist for the ATM maker's stock, Coster said in the Monday downgrade note.
The downgrade does not signal selling existing positions, since NCR is well-positioned to generate modest EPS and revenue growth in 2019, the analyst said.
JPMorgan expects NCR to generate revenue and PF EPS of $6.5 billion and $2.79, respectively, in 2019, and of $6.6 billion and $3.19 in 2020. The consensus expectations are pinned on PF EPS of $2.81 in 2019 and $3.20 in 2020.
Revenue and EPS growth in 2019 are likely to be driven by a year-on-year recovery in ATM sales, Coster said.
Yet in-bound call-volume is low, and the stock could remain rangebound until there are signs of new management being able to drive accelerated growth in software and SaaS, the analyst said.
Price Action
NCR shares were trading down 3.94 percent to $26.10 at the time of publication Monday.
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