Bank of America Corp DE Makes New Investment in PRA Group, Inc. $PRAA

Key Points

• Bank of America acquired 163,865 PRA Group shares worth approximately $3.1 million, representing about 0.44% of the company. Other institutions also increased exposure, with institutional investors owning 97.22% of PRAA.
• PRA Group reported quarterly EPS of $1.51, beating the $0.52 consensus estimate, while revenue reached $372.17 million versus expectations of $299.99 million.
• The company priced $400 million of senior notes due 2033 at an 8.5% coupon to repay revolving-credit borrowings. Although the financing may improve liquidity and extend maturities, its high fixed interest cost adds pressure; analysts’ average rating remains “Hold,” with a $26 target price.

Bank of America Corp DE bought a new stake in shares of PRA Group, Inc. (NASDAQ:PRAA - Free Report) during the 2nd quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The fund bought 163,865 shares of the business services provider's stock, valued at approximately $3,112,000. Bank of America Corp DE owned approximately 0.44% of PRA Group as of its most recent filing with the Securities and Exchange Commission (SEC).

Several other hedge funds have also bought and sold shares of PRAA. Bank of New York Mellon Corp purchased a new stake in PRA Group in the 2nd quarter worth approximately $2,404,000. Hsbc Holdings PLC purchased a new position in PRA Group during the second quarter valued at approximately $2,275,000. Assenagon Asset Management S.A. boosted its position in shares of PRA Group by 401.6% in the second quarter. Assenagon Asset Management S.A. now owns 601,444 shares of the business services provider's stock worth $11,421,000 after purchasing an additional 481,538 shares during the period. Connor Clark & Lunn Investment Management Ltd. bought a new position in shares of PRA Group in the second quarter worth approximately $1,114,000. Finally, BlackRock Inc. purchased a new stake in shares of PRA Group in the second quarter worth $84,183,000. Institutional investors own 97.22% of the company's stock.

PRA Group Stock Down 3.0%

Shares of NASDAQ:PRAA opened at $19.44 on Wednesday. The firm has a fifty day simple moving average of $19.06 and a two-hundred day simple moving average of $18.13. PRA Group, Inc. has a 52 week low of $10.25 and a 52 week high of $22.55. The stock has a market capitalization of $731.92 million, a P/E ratio of -2.89 and a beta of 1.11.

PRA Group (NASDAQ:PRAA - Get Free Report) last announced its earnings results on Thursday, August 6th. The business services provider reported $1.51 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.52 by $0.99. The firm had revenue of $372.17 million for the quarter, compared to analysts' expectations of $299.99 million. PRA Group had a negative net margin of 19.91% and a positive return on equity of 15.56%. On average, analysts expect that PRA Group, Inc. will post 3.93 earnings per share for the current year.

Key Headlines Impacting PRA Group

Here are the key news stories impacting PRA Group this week:

• Positive Sentiment: PRA Group priced $400 million of senior notes due 2033 at an 8.500% interest rate. The company intends to use the proceeds to repay borrowings under its revolving credit facility, potentially extending maturities and improving near-term liquidity. PRA Group Announces Pricing of Offering of $400.0 Million of 8.500% Senior Notes due 2033
• Neutral Sentiment: The notes are being offered in a private transaction exempt from Securities Act registration requirements. The financing is subject to customary closing conditions, and the company’s ultimate borrowing costs and balance-sheet impact will depend on the final transaction terms. PRA Group Announces Proposed Offering of $400 Million of Senior Notes Due 2033
• Negative Sentiment: The 8.500% coupon represents a significant financing cost. Replacing revolving-credit borrowings with $400 million of long-term notes increases fixed interest obligations and highlights continued reliance on debt, factors that may pressure future earnings and investor sentiment. PRA Group Prices $400M in Senior Notes to Repay Revolving Credit
• Negative Sentiment: Sell-side brokerages now rate PRA Group “Hold,” suggesting analysts see balanced risk and reward rather than a clear near-term catalyst. PRA Group Stock Now Rated Hold by Sell-Side Brokerages

Analyst Upgrades and Downgrades

PRAA has been the topic of a number of analyst reports. Wall Street Zen upgraded shares of PRA Group from a "buy" rating to a "strong-buy" rating in a research note on Saturday. Zacks Research upgraded PRA Group from a "hold" rating to a "strong-buy" rating in a research note on Monday, August 10th. Finally, Weiss Ratings reissued a "sell (d)" rating on shares of PRA Group in a report on Monday, September 21st. One equities research analyst has rated the stock with a Strong Buy rating, one has given a Buy rating, two have assigned a Hold rating and one has issued a Sell rating to the company's stock. According to MarketBeat.com, the stock presently has an average rating of "Hold" and an average target price of $26.00.

PRA Group Company Profile

PRA Group, Inc is a global financial services company that purchases portfolios of accounts receivable from banks, credit unions, consumer finance companies and other creditors. These portfolios generally consist of nonperforming or distressed consumer accounts, including unpaid credit card balances, personal loans and other forms of unsecured debt.

After acquiring receivables, PRA Group works directly with consumers to establish repayment arrangements and resolve outstanding obligations.

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