Monday, December 13, 2010

Cardtronics' (NASDAQ:CATM) Focus Should Remain on Debt

Barring an unforeseen catalyst, Cardtronics Inc.'s (NASDAQ:CATM) strategy in the near term should be to continue to pay down debt and decrease leverage.

Deutsche Bank (NYSE:DB) noted, "CATM has done well to address what kept the stock out of favor w/ market historically. We forecast almost $60m in FCF this year and nearly $70m in 2011. Unless a sizable M&A opportunity comes along (unlikely in our view), CATM probably will continue to pay down bank debt and reduce overall leverage to within 1-2x range."

EPS estimates for full year 2010 is $0.97 and for full year 2011 it is $1.25.

Concerning growth, Deutsche said it's pretty simple: They must add ATMs and increase fee streams.

Deutsche Bank maintains a "Buy" rating on Cardtronics, which closed Friday at $17.20, up $0.20, or 1.18 percent. Deutsche has a price target of $25 on them.

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