Wedbush Reiterates Outperform On Outerwall Following Broad Prices Increases

Wedbush analyst Michael Pachter reiterated an Outperform rating on Outerwall Inc (NASDAQ:OUTR) with a price target of $82,as the company will increase the daily rental prices of DVDs to $1.50 from $1.20 and Blu-Ray Discs to $2.00 from $1.50 on December 2, and will increase the daily rental price of video games to $3.00 from $2.00 on January 6.

Pachter noted, “We do not expect further future increases in price for Redbox segment unless VOD pricing increases. The last price increase for DVDs came in 2011. We believe this broad increase is sufficiently large to drive earnings growth in 2015.”

The analyst added, “The price increases should drive incremental revenue and earnings, with some offset from a decline in transactions and higher COGS/retail partner revenue share.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Michael Pachter has a total average return of 0.7% and a 47.6% success rate. Pachter has a -2.3% average return when recommending OUTR, and is ranked #1781 out of 3377 analysts.

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