Piper Jaffray Comments On Encore Capital As Leader In Debt Space

In a report published by Piper Jaffray, Encore Capital ECPG is a leader in debt space.

Piper Jaffray said that it is initiating on ECPG with an Overweight rating and a $37 target. “ECPG is one of the better positioned players in the industry focused on purchase/management of charged-off consumer debt. We believe ECPG has competitive advantages of scale and skill in an industry with rising entry barriers. Its collection model, with a cost advantage driven by its center near Delhi, India, provides a unique edge. We expect a substantial increase in debt sales by card companies in '11 and '12 to benefit industry leaders. We also believe ECPG should have an extended period of expanding earnings and ROE as impairments from older pools moderate and improved operating efficiency and conservative accounting lead to operating margin expansion.”

Encore Capital closed yesterday at $26.00.