World Acceptance To Gain From Lower Credit Provisions In FY24, Analyst Raises Estimates
Portfolio Pulse from Nabaparna Bhattacharya
BMO Capital Markets analyst James Fotheringham has reiterated an Underperform rating on World Acceptance Corporation (NASDAQ:WRLD), raising the price target to $59 from $47. WRLD reported Q1 revenues of $139.32 million, beating the consensus of $135.81 million. The analyst notes improving credit, rising yields, and fast growth in new loan originations, but predicts these trends will not sustain. Fotheringham raised WRLD core EPS estimates by +15% in FY2024E and +20% in FY2025E due to higher revenues and lower expected credit provisions.
July 24, 2023 | 7:20 pm
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World Acceptance Corporation's Q1 revenues beat consensus and its EPS estimates have been raised for FY2024E and FY2025E. However, the analyst predicts that the current trends of improving credit, rising yields, and fast growth in new loan originations will not sustain.
The analyst's reiteration of an Underperform rating, despite the positive Q1 results and raised EPS estimates, suggests a cautious outlook for WRLD. The prediction that current positive trends will not sustain could potentially impact the stock's performance.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100