On Apr 4, Zacks Investment Research downgraded
DFC Global Corp.
) to a Zacks Rank #5 (Strong Sell).
Why the Downgrade?
Following the announcement of fiscal third-quarter preliminary
results and a lowered fiscal 2013 guidance on Apr 1, DFC Global
witnessed sharp downward estimate revisions. All 4 estimates for
2013 as well as 2014 moved south. In addition, the share price
experienced a 52-week low of $12.95 on the same day.
DFC Global lowered the fiscal 2013 earnings expectation to $1.70
to $1.80 per share from $2.35 to $2.45 per share guided earlier.
The Zacks Consensus Estimate is just a penny above the low end of
the company's guidance.
Additionally, in the prelim result, DFC Global revealed that it
expects operating earnings between 20-24 cents for the third
quarter of fiscal 2013. This is substantially lower from 53 cents
earned in the year-ago quarter. The Zacks Consensus Estimate is
at the midpoint, representing a year-over-year decline of 59.4%.
DFC Global's management also stated that due to new loan rollover
limitations (three loan rollovers per customer) several
outstanding short-term consumer loans in the United Kingdom
became immediately due, resulting in a temporary 'credit crunch'
for the customers. As a result, the company is facing more loan
defaults in its UK business, which in turn weighs on the
earnings. In anticipation of the increasing number of loan
defaults, DFC Global constricted the lending-underwriting norms,
which again is weighing on loan growth in UK.
While the Zacks Consensus Estimate for 2013 slumped 29% to $1.71
over the last 7 days, the same for 2014 dropped 30% to $2.00 over
the same period.
Other Stocks to Consider
Among other financial service companies,
Euronet Worldwide Inc
SS&C Technologies Holdings, Inc
) carry a favorable Zacks Rank #1 (Strong Buy) and appear
DFC GLOBAL CORP (DLLR): Free Stock Analysis
EURONET WORLDWD (EEFT): Free Stock Analysis
MOODYS CORP (MCO): Free Stock Analysis Report
SS&C TECHNOLOGS (SSNC): Free Stock Analysis
To read this article on Zacks.com click here.