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Treasure Chest: EML Payments

Treasure Chest | Nov 25 2021

This story features EML PAYMENTS LIMITED. For more info SHARE ANALYSIS: EML

FNArena's Treasure Chest reports on money making ideas from stockbrokers and other experts. Today's idea is EML Payments from Wilsons

By Rudi Filapek-Vandyck

Whose Idea Is It?

Analysts at Wilsons

The subject:

Up and coming fintech company, EML Payments ((EML)).

The company announced earlier today the Central Bank of Ireland has refrained from keeping its local subsidiary under broad based operational limitations, albeit with the caveat that some limitations will remain in place for 12 months or less.

Investors have jumped on the news and pushed up the share price by no less than 21% with the last price at the time of writing this story being $3.33.

Wilsons notes, even after today's positive response, the EML share price is still well below where it was trading before the Irish Central Bank intervened in May and requested more disclose from the company about its subsidiary European business, Prepaid Financial Services (PFS).

Back in May, the share price was well above $5 and it had been as high as $5.75 earlier in the year. Wilsons doesn't necessarily think investors should expect to see the EML share price running back to where it was, as multiples for young fintechs such as EML have de-rated since, but the analysts are still confident the share price will be higher by March next year.

Why March? It is the analysts' forecast EML will report solid, high quality but moderated growth over the nine months to March 2022. As such, the share price is expected to recover more substantially by the time the FY22 numbers are due in August.

Post today's announcement, Wilsons has reiterated its Overweight rating with a price target of $4.62.

More info:

Other brokers covering EML Payments have not yet responded to the company's market update, but their twelve month price targets are well above the current share price. As shown on Stock Analysis on the FNArena website, Macquarie's price target is $3.90, but UBS has a target of $4.40 and Ord Minnett sits at $4.02.

It goes without saying, all ratings are positive (Buy or equivalent).

The low-marker among brokers, as far as we know, is Cannaccord Genuity, whose price target only goes as high as $3.50 and thus rates the stock as a Hold.

Prior to last year's global pandemic, EML Payments had crowned itself to one of the star performers on the ASX with the share price rallying from circa $1.40 to $5.64 throughout calendar 2019.

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