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Goldman upgrades EVERTEC as payments volumes in Puerto Rico recover

Goldman Sachs analyst James Schneider has upgraded EVERTEC Inc. to "neutral" as Puerto Rico recovers economically from a devastating series of hurricanes in 2017.

Schneider in a note to clients said the company has, over the past few months, seen a significant recovery in consumer payment volumes. EVERTEC is benefiting from ongoing relief efforts, as well as a temporary moratorium on mortgage payments in the aftermath of hurricanes Maria and Irma, the analyst said, though day-to-day consumer spending volumes continue to fluctuate significantly.

Even though approximately 15% of EVERTEC's merchants have not processed any transactions since Hurricane Maria, this decline has been offset by faster transaction growth at other larger merchants, according to Schneider. The company's 2018 guidance implies a meaningful recovery, the analyst added.

In addition to the upgrade, Schneider raised his 12-month price target to $17 from $12. He also elevated his EPS predictions for 2018 and 2019 to $1.40 and $1.50 from $1.20 and $1.30, respectively. His EPS estimate for 2020 is $1.60.