Jefferies upgraded Portfolio Recovery Associates (PRAA ) to hold from underperform, after the company on Monday entered into a revolving line of credit for about $75 million.
Analyst Daniel Fannon says the company increased its credit facility to satisfy higher purchase volumes. While details on pricing for the purchases are limited, Fannon thinks competition and demand for the new assets remains intense, despite the increase in supply in the period. Following Monday's announcement, Fannon raises his fourth quarter purchase estimate to $60.4 million from $18 million. He also ups his $2.43 2006 earnings per share estimate to $2.66 and his $36 price target to $40.