Wedbush analyst Moshe Katri upgraded payments company Vantiv Inc. to "outperform" from "neutral," saying its pending acquisition of Worldpay Group plc may reduce the company's exposure to national merchants and provide revenue and cost synergies.
The analyst said the acquisition, which is expected to close mid-January 2018, will help the company gain exposure to high-growth markets such as the U.K. and Asia Pacific. Katri further said the company's prior experience in undertaking the "transformative" acquisition of Mercury could accelerate the synergies, which may outpace initial guidance.
The acquisition will help Vantiv cut its exposure to national merchants to 20% from 40% in the face of "lackluster growth" and decelerating transaction volumes. Katri said Amazon.com Inc.'s entry to the grocery chain sector through the acquisition of Whole Foods Market Inc. increased the company's risk profile.
Katri's price target for the company is $100.00. The analyst's EPS estimates are $3.34 for 2017, $4.16 for 2018 and $4.88 for 2019.
