Payday Lender Gets Investor’s Endorsement
By Desmond CarlislePayday Loan Writer
Jefferies & Co., a full-service investment bank and securities firm which focuses on growing mid-sized companies and their investors, has initiated coverage of First Cash Financial Services, a provider of low-income consumer loans through pawn shops.
Jefferies analyst Daniel T. Fannon, who gave the quick cash loan company his all-important "Buy" rating, expects its earnings to grow at least 20 percent annually for the next two years.
"While a deteriorating economy could create some fluctuations in credit performance, we believe that it could also drive loan growth for pawn and payday services as subprime consumers seek new sources of credit," Fannon said. "Pawn and payday loans are an increasingly important alternative for customers with limited borrowing options."
He noted that First Cash is also the only U.S. pawn lender with operations focusing on Mexico, with 139 locations south of the border. The company is growing its domestic base as well. Fannon set a $23 price target, which is about 19 percent higher than the company's closing price Wednesday.
