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Why Shares of Euronet Worldwide, Inc. Popped 15% Today

By Travis Hoium - Oct 1, 2018 at 12:53PM

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Visa gave this financial services stock a big boost today.

What happened 

Shares of financial services company Euronet Worldwide, Inc. ( EEFT 2.61% ) jumped as much as 14.8% in early trading Monday after the company announced a big expected jump in 2019 earnings. Shares were maintaining a 12.5% gain on the day as of 11:20 a.m. EDT. 

So what

Last week, Visa announced that it would allow dynamic currency conversion (DCC) for international ATM transactions in April 2019, adding to DCC on point-of-sale transactions. Visa also said it will allow for ATM shared deposits, account-to-account transfers, mini-statements, and PIN changes, which could allow for opportunities for Euronet to add services. 

Hand inserting a card into an ATM

Image source: Getty Images.

The additions will allow Euronet to offer ATM DCC and other services to its partners, which is already expected to have a big impact on the business. Management said 2019 adjusted earnings per share are expected to be $0.60 to $0.65 higher based on the recently announced changes from Visa. 

Now what

2019 earnings estimates from Wall Street were for $6.22 per share in earnings, so it's possible Visa's changes will increase earnings by 10%. It's no wonder the stock is up a similar amount in early trading this week. 

I don't see any reason to think Euronet will give back today's gains, but if that happens in coming days, it will be a great buying opportunity for investors. For now, it seems like there's no downside to opening up more services on ATM transactions worldwide. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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