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TD Cowen said the banking crisis creates opportunity rather than risk for Deluxe Corp (NYSE:DLX) after attending virtual investor meetings with the company’s senior executives, including Barry McCarthy, CEO, Chip Zint, CFO, and Yogs Jayaprakasam, CTO.
The firm reiterated its Outperform rating and $29.00 price target on the stock, noting the company has been unfairly tarred with the “banking crisis” brush.
The company has transitioned its focus to place greater emphasis on profitability after experiencing a significant and continued increase in organic revenue growth.
Despite challenges in the banking sector, Deluxe sees a chance to expand its market share from data/payments competitors that might be experiencing significant product and financial disruption vs. Deluxe’s quality products and strong balance sheet. Furthermore, despite the impact of higher interest rates, the company’s free cash flow is on the rise.
“Deluxe attributes its expectation for the Payments segment to surpass Checks as the largest segment by revenue in FY23 to the success it continues to have in taking market share from competitors,” added the firm.
