) to buy from hold.
Analyst Andrew Jeffrey says second quarter results were excellent. He believes the electronic bill presentment and payment market fundamentals (consumer adoption and transaction growth) and CheckFree's operating profitability is outstripping the adverse effects of at least two large banks bringing electronic bill payment functionality in-house.
Jeffrey thinks CheckFree will emerge as a clear leader with a highly scalable processing platform. He conservatively projects the company can drive pretax return on invested capital toward 17.5% from the current 10.7% level over the next three to five years. He sees 77 cents fiscal 2003 (June) earnings per share, and 93 cents for fiscal 2004. He has a $25 12-month target.