Here’s What Analysts Are Saying as Wirecard Scandal Deepens

(Bloomberg) -- Wirecard shares tumbled as much as 50% in early trading, extending last week’s plunge, after the company said the missing 1.9 billion euros ($2.1 billion) from its balance sheet probably doesn’t exist and withdrew its latest set of financial results.

While the number of analysts still covering the stock is dwindling, Bank of America cautioned that the shares will remain volatile and will be influenced by newsflow from stakeholders, noting that Wirecard could be ejected from Germany’s blue-chip DAX Index.

The company is unlikely to be a takeover target for a publicly listed buyer given the lack of visibility on its financials, Citi said. The crisis of confidence in the shares means that Wirecard may need to change its name and hire well-respected industry figures, they added.

Here’s a summary of what analysts are saying:

Bank of America, Adithya Metuku

(Underperform rated, PT EU14)

Unlikely that clarity on Wirecard’s underlying business will arise for a notable period of time.Shares to be volatile depending on news flow from various stakeholders such as lenders and shareholders; short covering, possible DAX exclusion will be closely watched.Risk of lenders calling in financing will remain an overhang even if they initially grant a reprieve.

Citi, Robert Lamb

(Neutral rated, no PT)

The KPMG/E&Y audits and today’s announcement provide such uncertainty over the company’s financials that there is no way to quantify the true nature of the business with conviction.If the company is able to navigate through the current crisis it will be hard to restore confidence in Wirecard itself.Company may need to change its name or hire well-respected industry figures.Unlikely that a listed buyer will emerge in the near term given the questions over financials.Worldline could benefit modestly from one less competitor when chasing outsourcing deals with banks.Wirecard is least preferred stock in Citi’s coverage.

Bryan Garnier, David Vignon

(Sell rated, fair value under review)

The missing EU1.9b raises doubts about the veracity of Wirecard’s accounts in previous years.Wirecard’s situation is unlikely to benefit Adyen or Wordline/Ingenico.

Story Link: Here’s What Analysts Are Saying as Wirecard Scandal Deepens

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