On Mar 13, Zacks Investment Research upgraded Euronet Worldwide Inc. (EEFT - Snapshot Report) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Euronet Worldwide has been witnessing a boost in its estimates following strong fourth-quarter results and inorganic growth through acquisitions and alliances. Moreover, this well-known electronic payment provider delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 0.8%. The long-term expected earnings growth rate for this stock is 14%.
On Feb 12, Euronet Worldwide reported fourth-quarter operating earnings of 44 cents per share, which surpassed the Zacks Consensus Estimate of 42 cents. Earnings were primarily aided by 10% growth in total revenue along with a 10% rise in total transactions, contributed by all segments.
Additionally, substantial growth in ATMs under management and higher demand for software products generated growth. Even the non-mobile products in Germany and prepaid mobiles in the U.S. showcased improvements.
While higher expenses and debt are the near-term limitations, Euronet Worldwide’s balance sheet remains fairly liquid, also reflected by the investment grade rating received from S&P. The acquisition of Pure Commerce is expected to be accretive to earnings by 3–4 cents per share in 2013.
Based on the currency fluctuations and seasonal factors, Euronet Worldwide projects the first-quarter 2013 pre-tax cash earnings to be around 37 cents per share.
Subsequently, the Zacks Consensus Estimate for the first-quarter 2013 is pegged at 31 cents per share, while no estimate revisions were experienced in the last 30 days. The estimate for full-year 2013 rose 1.8% to $1.68 a share in the last 30 days, witnessing one upward revision but no downward revisions.
Other Stocks to Consider
Apart from Euronet Worldwide, other stocks that are outperforming in the financial sector include CNO Financial Group Inc. (CNO - Analyst Report), XL Group Plc (XL - Analyst Report) and Moody’s Corp. (MCO - Analyst Report). All these stocks carry a Zacks Rank #1 (Strong Buy).