NEW YORK (AP) -- An analyst cut Rent-A-Center's rating and price target on Friday, citing ongoing softness in its core rent-to-own business.
Laura Champine of Canaccord Genuity lowered Rent-A-Center Inc.'s rating to "Hold" from "Buy" and reduced its price target to $37 from $42.
Champine said that it seems like Rent-A-Center is neglecting the core rent-to-own portion of its business, instead concentrating on kiosks, international efforts and other areas. The analyst said that the company's lower-income customers struggled with tax refund delays, payroll tax hikes, and increased gas prices early in the first quarter and believes these consumers will still face pressure from higher taxes and a slow employment recovery.
Champine said she doesn't think recent buybacks will be enough to mask weakness in the core rent-to-own business.
"While we respect analysts' divergent viewpoints, we disagree with the belief that our core business is being neglected in favor of other pursuits," Rent-A-Center spokesman Xavier Dominicis said in a statement. "Rent-A-Center remains steadfast in its commitment to its core business."
Shares of Rent-A-Center fell 71 cents, or 2 percent, to $35.10 in morning trading.