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Credit Suisse, Guggenheim analysts expect Greensky to outperform

Two equity analysts have begun covering Greensky Inc.'s stock with bullish outlooks.

Credit Suisse analyst Paul Condra initiated coverage of the shares with an "outperform" rating and a price target of $29.

Condra expects small and midsize banks to increasingly seek partnerships with financial technology companies such as Greensky as those banks "fall further behind in the technology arms race" compared with large-bank competitors. Greensky, which allows merchants to offer credit at the point of sale to customers buying large-ticket items, gives banks a low-cost customer acquisition channel and helps merchants sell more expensive products to consumers.

Condra expects revenue growth of 33% and EBITDA margins of 44% for Greensky in 2018. His EPS estimates for 2018, 2019 and 2020 are 64 cents, 89 cents and $1.15, respectively.

Guggenheim's Jeff Cantwell initiated coverage of the company with a "buy" rating and a price target of $30.

Cantwell wrote that Greensky has a unique hold on the growing point-of-sale financing market by presenting merchants' customers with financing options from its bank partners at the point of sale.

"We expect to see an increase in capital commitments from both existing and new [bank] partners," the analyst wrote.

The analyst's adjusted EPS estimates are 65 cents for 2018, 95 cents for 2019 and $1.32 for 2020.