Stifel cuts NCR Voyix stock price target to $13, maintains Buy

On Thursday, Stifel analysts adjusted their outlook on NCR Voyix (NYSE:VYX) shares, reducing the price target from $15.00 to $13.00 while reaffirming a Buy rating. Currently trading at $7.80, near its 52-week low of $7.67, InvestingPro analysis suggests the stock is undervalued. The revision comes after a thorough analysis of the company’s financial model, taking into account a shift in revenue and profit expectations towards the latter part of the year. This change aligns with the forecasts NCR Voyix discussed during its fourth-quarter earnings call.

The analysts noted that despite NCR Voyix’s significant dependence on hardware manufacturing in Mexico, the potential impact of tariffs might be less severe than originally anticipated. With a gross profit margin of 21.94% and projected revenue decline of 8% for FY2025, according to InvestingPro data, this assessment suggests that the concerns surrounding tariff implications may not heavily influence the company’s financial performance.

Looking ahead, the transition of NCR Voyix to an Original Design Manufacturer (ODM) model through its partnership with Ennoconn is slated to occur in the second half of the year. Stifel analysts expect that this strategic shift will mitigate supply chain issues, thus having a limited effect on the company’s financials over the medium to long term. This expectation is set notwithstanding any broader impact that may arise within the end markets.

The decision to lower the price target to $13 reflects a compression in the valuation multiples, according to the analysts. Despite this adjustment, Stifel continues to see the stock favorably, as evidenced by the sustained Buy rating. The firm’s commentary indicates a belief in the company’s resilience and strategic initiatives to navigate through market challenges while maintaining growth prospects.

In other recent news, NCR Atleos Corporation reported its fourth-quarter earnings, surpassing analyst expectations with an adjusted earnings per share of $1.11, outperforming the consensus estimate of $0.80. However, revenue for the quarter was slightly below expectations at $1.11 billion, compared to the anticipated $1.16 billion. For the full year 2024, NCR Atleos achieved a 3% year-over-year revenue growth, totaling $4.3 billion, with recurring revenue increasing by 5% to $3.1 billion. Looking ahead, the company anticipates core revenue growth of 3-6% in constant currency for 2025, alongside projected adjusted EBITDA growth of 7-10% and non-GAAP diluted EPS growth of 21-27%.

In other developments, DA Davidson analyst Matt Summerville maintained a Buy rating on NCR Voyix, setting a price target of $17. The analyst revised the company’s 2025 and 2026 estimates, citing a more conservative outlook on core growth, particularly in hardware, leading to lower EBITDA margin forecasts. Despite these revisions, Summerville emphasized NCR Voyix’s strong balance sheet, which supports further stock buybacks, and highlighted consistent growth in Annual Recurring Revenue, driven by a 98% customer retention rate and new client acquisitions. The analyst’s favorable view on NCR Voyix is based on its commitment to shareholder returns and attractive stock valuation.

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