Enova International (ENVA – Research Report), the Financial sector company, was revisited by a Wall Street analyst today. Analyst David Scharf from JMP Securities remains neutral on the stock and has a $62.00 price target.
David Scharf has given his Buy rating due to a combination of factors impacting Enova International’s financial strategies and expected performance. The company’s recent move to price a $400 million offering of Senior Unsecured Notes signals a strategic step towards retiring its existing Senior Notes due 2024. This retirement not only simplifies the financial structure but importantly clears the path for Enova to aggressively initiate share buybacks, leveraging the additional $200 million authorization by the board. Scharf anticipates that this buyback activity, in conjunction with the reduction of the average share count by about 15%, will substantially increase the earnings per share (EPS) for 2024, creating a more attractive investment profile.
Furthermore, the mechanics of the buyback have been carefully considered, with restrictions from prior notes being addressed through the retirement of the 2024 Notes and the consent from the 2025 noteholders. The calculated approach towards repurchasing shares—expected to be executed promptly and completed by the end of the first quarter of 2024—along with the raised EPS estimate from $7.78 to $8.33, underpins Scharf’s positive outlook. This, coupled with an increase in the price target from $58 to $62, reflects not only a sound financial strategy by Enova but also the potential for significant shareholder value creation, justifying the Buy rating.
According to TipRanks, Scharf is a 5-star analyst with an average return of 8.9% and a 48.97% success rate. Scharf covers the Financial sector, focusing on stocks such as Bread Financial Holdings, Synchrony Financial, and Atlanticus Holdings.
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Enova International (ENVA) Company Description:
Enova International, Inc. engages in the provision of online financial services. Its products and services include short-term consumer loan, line of credit accounts, instalment loans, receivables purchase agreements, credit services organization (CSO) program, bank program, and decision management platform-as-a-service and analytics-as-a-service. It caters non-prime credit consumers and small businesses in the United States and Brazil. The company was founded by Albert Goldstein and Alexander Goldstein in 2003 and is headquartered in Chicago, IL.
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