VeriFone's Stock Surges After Stifel Nicolaus Says It Is Now a Buy

Shares of VeriFone Systems Inc. surged 2.9% in morning trade Tuesday, after Stifel Nicolaus upgraded the electronic payment terminal maker on the belief that the recent success with Europay, MasterCard and Visa (EMV) terminal upgrades are being underappreciated by investors. Analyst Christopher Brendler raised his rating to buy from hold and set stock price target at $42, which is 19% above current levels. He believes concerns over the negative effects of foreign currency (FX) moves are overblown. "In our view, FX headwinds are masking growing top line traction and the company is not getting enough credit for its outstanding execution on the domestic EMV opportunity," Brendler wrote in a note to clients. "With the stock underperforming over the last 6 months despite accelerating growth, we believe shares will revalue as FX normalizes and EMV-powered organic growth shines." The stock has gained 6.8% in the past six months, while the S&P 500 has advanced 7.7%.