RCII

01-Feb-16 16:51 ET
Rent-A-Center beats by $0.02, misses on revs  (13.28 -0.34)
  • Reports Q4 (Dec) earnings of $0.54 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus of $0.52; revenues fell 0.4% year/year to $793.8 mln vs the $806.33 mln Capital IQ Consensus and same store sales +1.7%

2016 Outlook:

  • The Co expects to deliver growth in earnings per share assuming:
    • Core U.S. revenue down 4.0% to 6.0% driven by same store sales decline of 1.0% to 3.0% and the impact of store rationalization efforts
    • Acceptance Now revenue of $850-900 million
  • The Co expects to deliver improved operating profit margin, EBITDA, and free cash flow in both the Core U.S. and Acceptance Now
  • Courtesy of Briefing.com

With trailing earnings of 2.03 and 2016 projected earnings of 2.11 RCII is under valued. At my target buy of RCII’s forward P/E will be 4.8.

Buy at 10 to 10.25

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