2023-03-15 14:08:49 ET
UBS on Wednesday upgraded Jack Henry & Associates ( NASDAQ: JKHY ) to Buy from Neutral on the basis that its recent selloff is overdone, despite the fintech's exposure to financial institutions, which are facing pressure amid the fallout from failed lenders Silicon Valley Bank and Signature Bank.
In the past five sessions alone, JKHY has sank 11.5% as market participants price in the potential for contagion effects from the bank failures.
Helped by robust bank and credit union demand for information technology spend, along with its record Q2 sales , Jack Henry ( JKHY ) is poised to produce mid-to-high single digit revenue growth over the medium-term, UBS wrote in a note to clients.
"During the '08-'09 financial crisis, Jack Henry still generated positive revenue growth," the note pointed out.
Earlier, SA's Quant system flagged JKHY at high risk of performing badly due to declining growth and negative EPS revisions. By comparison, the average Wall Street analyst views the stock as a Hold.
JKHY drifted higher by 0.8% in mid-afternoon trading.
SA contributor Heavy Moat Investments also gave JKHY a Hold rating, citing the market pricing "too much into the stock to see significant upside in the shares."
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Jack Henry upped to Buy at UBS as recent stock rout overblown