Retalix Ltd. (RTLX)

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EKN: Retalix’s profits could grow 15% a year

Ehrenkrantz King Nussbaum: We believe that Retalix is becoming the leader in its market segment.

Ofer Levi 7 Dec 05 14:55

US investment boutique Ehrenkrantz King Nussbaum (EKN) began its coverage of the Retalix (Nasdaq: RTLX; TASE: RTLX) share yesterday with a “Market outperform” recommendation and a target price of $26, 23% higher than the current market price on Nasdaq.
EKN analyst Jim Yin believes that Retalix’s profit could grow by 15% a year in the next three-to-five years, through a combination of acquisitions and internal growth. He wrote, “We believe that Retalix is becoming the leader in its market segment. In our opinion, Retalix provides the most comprehensive solutions, which meet the needs of the food and fuel industries.”

Yin predicts that Retalix’s profit margin will rise from an expected 11.8% this year to 13.2% in 2006. He also expects profit per share of $0.83 this year, compared with an analysts’ consensus of $0.81, rising to $1.07 per share next year. Yin forecasts $54.8 million in revenue in the fourth quarter, including $31 million from sales of products.

”We believe that demand for the company’s products stems to a great extent from worldwide economic improvement. We also believe that demand was a result of technological innovation, which enabled retailers to collect information about their customers. We expect Retalix’s sales to grow, as the company presents additional modules, and improves its current product line. We also expect the company’s acquisitions to generate additional revenue from crossover sales,” Yin wrote.

Published by Globes [online] - www.globes.co.il - on December 7, 2005

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