World Acceptance price target lowered to $56 from $58 at BMO Capital

BMO Capital lowered the firm’s price target on World Acceptance to $56 from $58 and keeps an Underperform rating on the shares. While the company reported a “big” cost-driven Q2 earnings beat, the firm is reducing its out-year estimate by 31% on slower growth and higher provisions, stating that this is the wrong time for World Acceptance to release reserves, given subprime borrower credit stress from current inflation and future unemployment, the analyst tells investors in a research note. BMO adds that the stock also trades at a “very meaningful premium” to those of its higher-quality peers.