Goldman Sachs analyst Lara Fourman has initiated coverage of Euronet Worldwide Inc. at "buy," writing that the company's ATM and prepaid businesses are "underappreciated."
"We do not think the Street fully appreciates the resilience of Euronet's ATM growth strategy and the turnaround of its prepaid card business," Fourman wrote in a Dec. 14 research note to clients.
She believes that the company's revenue growth in 2018 is being underestimated. She noted that Euronet Worldwide is growing in countries where ATM penetration is low and cash usage high, expecting it to grow more than 20% organically each year. On the prepaid card business, she expects the company's shift toward nonmobile products to accelerate the growth of its epay business, which comprises 33% of its revenue.
Her price target for the company is $110. Her EPS estimates are $4.55 for 2017, $5.50 for 2018 and $6.40 for 2019.
Separately, the coverage of Western Union Co. has been transferred to Fourman from Jim Schneider with a "sell" rating and $17 price target.
Fourman noted the improvement related to the company's execution of cost-savings initiatives and its digital offering, but she noted that industry consolidation and competitive pricing environment could pressure EPS and share price.
The 2017 EPS estimate for Western Union remains at $1.55. The 2018 and 2019 EPS estimates have been changed to $1.80 from $1.75 and to $1.90 from $1.85, respectively.