FBR Capital Cuts Price Target on World Acceptance (WRLD) Following 1Q16

FBR Capital maintained a Market Perform rating on World Acceptance Corp (NASDAQ: WRLD), and cut the price target to $55.00 (from $64.00), following 1Q16. WRLD reported EPS of $2.71 compared to consensus estimates of $2.58.

Analyst Bob Ramsey commented, "We reiterate our Market Perform rating on shares of World Acceptance Corporation (WRLD) and reduce our price target to $55.00 (from $64.00), equal to 5.5x our FY(Mar)17 EPS. In F1Q(Jun)16, WRLD's revenues declined 7.4% year over year as loans shrank on a year-over-year basis for the second quarter, reflecting tepid domestic demand and peso depreciation. Plans to sell charged-off loans announced last quarter came into question as the buyer has notified WRLD that it is concerned performance is not up to its expectations, and loan sales add nearly $2 million to quarterly earnings. WRLD generates significant free cash flow, but its amended revolver restricts buybacks or capital deployment. Despite weakening fundamentals, shares are inexpensive at current levels, but given WRLD's regulatory overhang, there does not seem to be an incremental buyer. Reflecting lower revenues, we reduce our FY16 operating EPS estimate to $10.20 (from $10.80) and our FY(Mar)17 estimate to $10.00 (from $10.75)."

For an analyst ratings summary and ratings history on World Acceptance Corp click here. For more ratings news on World Acceptance Corp click here.

Shares of World Acceptance Corp closed at $51.37 yesterday.

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