NEW YORK (AP) -- Shares of Diebold Inc. jumped on Tuesday as an analyst raised his rating and price target on the maker of ATMs and bank vaults, citing better-than-expected demand in the financial services sector.
THE SPARK: Paul Coster of JP Morgan boosted Diebold to "Neutral" from "Underweight" and increased the North Canton, Ohio company's price target to $34.50 from $29. In a client note, the analyst said that a strong fourth-quarter performance and 2012 outlook from rival NCR Corp. made him take a second look at demand for the sector.
THE ANALYSIS: Coster said that he still favors NCR over Diebold, but says Diebold "is positioned to perform in line with the mean of our coverage universe." The analyst had anticipated that financial services revenue growth would slow in mid-2012 due to the European debt crisis, but now says there could be a modest year-over-year revenue increase of 5 percent.
An email was sent to the company seeking comment but there was no immediate reply.
STOCK ACTION: Diebold's stock gained $1.35, or 4.1 percent, to $34.59 in afternoon trading. Its shares have made an erratic recovery from their low of $24.70 in early August. They traded over the past year as high as $37.12 per share in late April.