Encore Capital Group (NASDAQ:ECPG) has seen its price target increased from $56.00 to $62.00 by Janney Montgomery Scott, as stated in a research note released on October 5, 2023. The brokerage maintains a buy rating on the asset manager’s stock, reflecting renewed confidence in its performance.
In addition to Janney Montgomery Scott’s revised target, other brokerages have also provided insights into Encore Capital Group’s stock. On October 8, Weiss Ratings reaffirmed a “sell (d-)” rating for the company. Conversely, Zacks Research upgraded its rating from “hold” to “strong buy” on October 10, indicating a shift in sentiment among analysts. Currently, one investment analyst rates the stock as a strong buy, three have given it a buy rating, and one has assigned a sell rating. According to MarketBeat.com, the average rating for ECPG stands at “Moderate Buy” with an average target price of approximately $61.67.
Strong Earnings Performance
Encore Capital Group recently reported its quarterly earnings on November 5, 2023. The company announced earnings per share (EPS) of $3.17, significantly surpassing analysts’ expectations of $1.92 by $1.25. The firm recorded a revenue of $460.35 million for the quarter, exceeding the consensus estimate of $410.70 million. This represents a 25.4% increase in revenue compared to the same quarter the previous year.
Despite a negative net margin of 6.07%, Encore Capital Group achieved a commendable return on equity of 19.61%. Analysts project that the company will post an EPS of $5.09 for the current financial year, indicating a positive outlook.
Institutional Investment Trends
Recent activity among institutional investors highlights growing interest in Encore Capital Group. Heartland Advisors Inc. acquired a new stake during the first quarter, valued at approximately $10.1 million. Meanwhile, Stephens Investment Management Group LLC increased its holdings by 9.1% in the second quarter, now owning 1,248,831 shares worth about $48.34 million after purchasing an additional 104,367 shares.
Wellington Management Group LLP also expanded its position, raising its stake by 13.0% during the first quarter, now holding 790,392 shares valued at roughly $27.10 million. Arrowstreet Capital Limited Partnership made a notable increase of 476.6% during the same quarter, acquiring 92,978 shares worth about $3.60 million after buying an additional 76,852 shares. Allianz Asset Management GmbH lifted its holdings by 38.6%, now owning 196,004 shares valued at $6.72 million.
Encore Capital Group specializes in debt recovery solutions and related services for consumers across financial assets globally. The company typically acquires portfolios of defaulted consumer receivables at significant discounts, managing them as clients work towards repayment and financial recovery.
The recent adjustments in ratings and the impressive quarterly earnings report indicate a dynamic shift in the market perception of Encore Capital Group, showcasing its potential for growth.
