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On Monday, Keefe, Bruyette & Woods analysts increased the price target on shares of Atlanticus Holdings Corp. (NASDAQ: ATLC) to $52 from the previous $52, while maintaining a Market Perform rating. The adjustment reflects the firm’s positive outlook on the company’s momentum, which is anticipated to extend into 2025.
Atlanticus Holdings’ stock rose on Friday, marking an 11% increase in response to the company’s fourth-quarter performance, which exceeded expectations. The company reported strong results across major line items and key metrics, surpassing the projections of Keefe, Bruyette & Woods analysts. Notably, revenue was higher than anticipated.
The company’s credit performance also demonstrated resilience, with the combined principal net charge-off (NCO) rate declining to 22.0%, compared to 22.2% in the third quarter of 2024 and 26.4% in the fourth quarter of 2023. Despite the current uncertainty in the macroeconomic landscape, Atlanticus has not observed any signs of weakening within its credit book. Management remains optimistic about the potential for further improvement in NCOs in 2025, barring an economic recession. InvestingPro analysis reveals the company maintains strong financial health with a current ratio of 8.69, indicating excellent liquidity management. For deeper insights into ATLC’s financial health and detailed analysis, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Analysts at Keefe, Bruyette & Woods expect Atlanticus to continue experiencing robust growth in receivables throughout the year. This projection is supported by moderating inflation and low unemployment rates, which are beneficial to the company’s customer base. Additionally, the partnership with Synchrony is projected to foster more partnerships in the future.
The firm’s decision to raise the price target and estimates for Atlanticus Holdings comes with a reiteration of the Market Perform rating, signaling a steady outlook for the company’s stock.
In other recent news, Atlanticus Holdings Corp. reported impressive fourth-quarter earnings, with an operating EPS of $1.42, surpassing expectations. The company’s revenue also exceeded forecasts, contributing to a strong finish to the year. Analysts at Keefe, Bruyette & Woods highlighted the robust revenue and credit trends, which led them to maintain a Market Perform rating and a $45 price target for the company. Despite an increase in expenses, the rise in revenue effectively offset these costs, reinforcing confidence in Atlanticus Holdings’ financial trajectory.
Similarly, JMP Securities maintained a Market Outperform rating and a $75 price target following the earnings report. Atlanticus Holdings’ net income reached $27 million, exceeding JMP’s $23 million estimate. The positive performance was attributed to favorable fair value adjustments and improving credit trends. Analysts noted the growth in point-of-sale retail cards, which contributed to the results and are expected to continue influencing the company’s portfolio yield. Both analyst firms expressed confidence in Atlanticus Holdings’ strategic management and potential for sustained growth.
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