Macquarie rates EML as Outperform (1) -EML Payments looks to...

Macquarierates EML asOutperform(1) -

EML Payments looks to benefit from the impacts of interest rate forward curves on its $2.7bn stored client balances according to Macquarie. The broker predicts interest on stored balances will peak at 1.7% in FY24, equating to a $45m interest revenue upside.

Further, the broker expects the removal of the Cental Bank of Ireland growth cap will support the growth of the company's gross profit ratio in FY23.

The Outperform rating is retained and the target price increases to $3.95 from $3.80.

Target price is$3.95Current Price is$2.89Difference:$1.06
IfEMLmeets the Macquarie target it will return approximately37%(excluding dividends, fees and charges).

Current consensus price target is$4.18, suggesting upside of44.5%(ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Macquarie forecasts a full yearFY22dividend of0.00cents and EPS of7.30cents. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is39.59. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is5.8, implying annual growth ofN/A. Current consensus DPS estimate is0.2, implying a prospective dividend yield of0.1%. Current consensus EPS estimate suggests the PER is49.8.

Forecast for FY23:

Macquarie forecasts a full yearFY23dividend of0.00cents and EPS of13.60cents. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is21.25. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is10.5, implying annual growth of81.0%. Current consensus DPS estimate is1.9, implying a prospective dividend yield of0.7%. Current consensus EPS estimate suggests the PER is27.5.