U.S. Markets open in 2 hrs 9 mins

KeyBanc: Diebold's New CEO Executing Well, But Long-Term Growth Remains A Concern

Priya Nigam

Diebold Nixdorf Inc (NYSE: DBD) delivered a fourth-quarter revenue and EBITDA beat Wednesday and raised its cost savings target. Yet the company’s growth continues to be lower than peers and industry conditions are worsening, according to KeyBanc Capital Markets.

The Analyst

KeyBanc’s Josh Beck maintains a Sector Weight rating on Diebold Nixdorf.

The Thesis

Diebold Nixdorf reported adjusted revenue at $1.29 billion, representing 7-percent growth and beating Street expectations of $1.23 billion. Adjusted EBITDA came in at $127 million.

The  financial technology company achieved a 9.8-percent margin, despite a lower-margin retail revenue mix. The margin benefited from progress with the "DN Now" cost initiative, Beck said in a Thursday note. 

The company’s backlog grew by 1 percent and orders by 10 percent year-on-year. The DN Now cost savings target for 2021 has been raised from $250 million to $400 million, suggesting that the new CEO is executing well, the analyst said. 

KeyBanc reduced the revenue estimate for 2019 to $4.45 billion to reflect a decline in services growth — although with higher product revenue. The sell-side firm raised its EBITDA estimate for 2019 to $400 million.

View more earnings on DBD

Diebold Nixdorf’s stock is trading at a multiple close to peers, despite the company’s lower growth and margins.

Price Action

Diebold Nixdorf shares were up 9.79 percent at $8.13 at the time of publication Friday. 

Related Links:

58 Biggest Movers From Yesterday

Mid-Day Market Update: Crude Oil Up Over 2%; Diebold Nixdorf Shares Spike Higher

Latest Ratings for DBD

Date Firm Action From To
Jan 2019 DA Davidson Upgrades Neutral Buy
Jan 2019 DA Davidson Upgrades Neutral Buy
Aug 2018 Credit Suisse Maintains Neutral Neutral

View More Analyst Ratings for DBD
View the Latest Analyst Ratings

See more from Benzinga

© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.