-- EML Payments' (ASX:EML) recent cut to fiscal 2026 guidance reflects timing issues and a deferral of revenue as opposed to a loss of customer contracts, Jefferies said in an April 17 note.
The company on April 13 revised its fiscal-year underlying earnings before interest, taxes, depreciation, and amortization guidance to a range of AU$47 million to AU$50 million from AU$58 million to AU$60 million.
The outlook downgrade came amid delayed program implementations and softer trading in the company's Northern Hemisphere businesses as economic uncertainty increased.
Jefferies said the company still faces a significant ramp to reach its AU$125 million pipeline target by June. There are risks to this target due to economic uncertainty, and EML's fiscal 2028 target of AU$95 million in underlying EBITDA may also be pushed out as a result of the slowdown, the equity research firm said.
"Given the phase of transition EML is in, we apply a 15% discount for the uncertainty associated with earnings," Jefferies said in commentary on the company's valuation.
It lowered EML's price target to AU$0.66 from AU$0.78 while retaining a buy rating on the stock.
Shares of EML were nearly 4% higher in recent Monday trade.