Shares of NCR Corp. could be worth more than twice their current value by 2015 because products from the maker of bank automated teller machines and other touch-screen devices quickly pay for themselves, appealing to customers even in a slow-growth environment, Barron's said in its July 16 edition.
Within banking, NCR has a good balance of business across mature and emerging markets including China and Brazil, where it often holds a No. 1 or No. 2 market share, the newspaper said.
More than half of NCR's revenue comes from banking clients, where in North America its main rival is Diebold Inc.
Among its latest products in this category are ATMs that let customers deposit checks without envelopes and receive scanned copies of the checks within seconds, Barron's said.
The company is also a leader in point-of-sales equipment such as self-checkout machines, self-service airport kiosks, and touch-screen devices that are gaining wider use in hotels, movie theaters, restaurants and even sports venues, the newspaper added.
Weighing on NCR shares are pension obligations, including a $1.3 billion liability incurred in 2008, although the company is expected in October to set plans to address the problem, the financial weekly said.
Ten analysts on average expect NCR to post adjusted profit of $2.47 per share in 2012, excluding one analyst calling for $1.55, on revenue of about $5.94 billion, according to Thomson Reuters I/B/E/S.
NCR shares closed Friday at $22.87, giving the Duluth, Georgia-based company a market value of about $3.63 billion, according to Reuters data.
Barron's said the San Francisco hedge fund Marcato Capital Management LLC believes that NCR shares should trade at 15 times adjusted earnings by 2015. It said this projects to a $51 stock price even when accounting for the pension shortfall.
Second-quarter results are scheduled to be released on July 19.
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