Analysts have been eager to weigh in on the Financial sector with new ratings on Healthequity (HQY) and Credit Acceptance Corp (CACC).
Healthequity (HQY)
Cantor Fitzgerald analyst Steven Halper reiterated a Buy rating on Healthequity yesterday and set a price target of $90. The company’s shares closed yesterday at $72.93.
Halper commented:
“We reiterate our Overweight rating and $90 price target. We continue to believe that DCF valuation is more appropriate for HQY shares than P/E, given the long- term growth characteristics of the HSA market in general, HQY’s growth outlook in particular, and the company’s strong free cash flow generation. We continue to expect annual top-line growth of 19-20% through FY24, and slightly higher operating margins and modestly higher capital expenditure requirements. We believe that HQY’s fundamentals are strong and that the shares’ current valuation does not fully reflect the long-term growth potential.”
According to TipRanks.com, Halper is a 5-star analyst with an average return of 17.4% and a 62.5% success rate. Halper covers the Services sector, focusing on stocks such as WellCare Health Plans, Tivity Health Inc, and Hms Holdings Corp.
Healthequity has an analyst consensus of Strong Buy, with a price target consensus of $88.25.
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Credit Acceptance Corp (CACC)
Oppenheimer analyst Dominick Gabriele maintained a Hold rating on Credit Acceptance Corp yesterday. The company’s shares closed yesterday at $497.94, close to its 52-week high of $504.42.
Gabriele observed:
“CACC reported 1Q EPS of $8.65 vs. our/consensus’ $7.94/$7.85E, a strong beat on better fees, provision and better tax rate (20.3% vs. 24.0%E). CACC’s average loan size continues to grow but this doesn’t necessarily mean they are just providing longer-term loans on older cars. Instead today’s commentary suggests they are in fact likely financing younger cars in the purchase program vs. dealer. Thus as the mix continues towards purchase loans, the average vehicle contract will continue to rise. This means more interest income yet perhaps not as poor credit quality as some may expect. 2015/2016 vintages performed worse than CACC’s original forecasted collection rates yet these make up only 3.6%/10.6% of the estimated remaining collections, while the 2018/2019 make up ~62% and continue to improve.”
According to TipRanks.com, Gabriele is a 3-star analyst with an average return of 4.1% and a 68.8% success rate. Gabriele covers the Financial sector, focusing on stocks such as Discover Financial Services, Santander Consumer USA, and Capital One Financial.
Currently, the analyst consensus on Credit Acceptance Corp is a Moderate Sell with an average price target of $387.33.
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