Shares of NCR (NYSE:NCR) popped today, up by 12% as of 12:05 p.m. EST, after the company received a slew of bullish reiterations and price target increases. The analyst activity comes a day after the company hosted a virtual investor day event.
The fintech company, which provides financial software and payment services to numerous industries, highlighted how its business model has evolved in recent years to better align the company with the industries that it serves. NCR is shifting its banking business to an ATM-as-a-service subscription model that generates recurring revenue, while its retail segment leads in providing self-checkout services. NCR's platform also provides the hospitality sector with a comprehensive management platform that will keep expanding market share, according to management.
NCR said that results so far in the fourth quarter are consistent with the commentary it provided in October. The company is on track to achieve $125 million to $150 million in annual cost savings. Forecasting for next year is nearly complete, and NCR expects "modest sequential improvement in end markets" in 2021.
Analysts were impressed by the updates, leading to a wave of price target bumps:
- Oppenheimer: Maintains outperform rating, boosts price target from $25 to $35.
- Morgan Stanley: Reiterates overweight rating, increases price target from $34 to $42.
- Stephens: Keeps overweight rating, lifts price target from $30 to $39.
- RBC Capital: Reiterates outperform rating, raises price target from $32 to $41.
- Benchmark: Increases price target from $30 to $40.
- J.P. Morgan: Boosts price target from $28 to $34.
RBC analyst Daniel Perlin is encouraged by the expected return to growth, while Morgan Stanley analyst Katy Huberty believes the company has reached "a turning point" after laying a foundation for margin expansion. Oppenheimer analyst Ian Zaffino expects strong free cash flow in the years ahead thanks to improvements to the company's cost structure.