KeyBanc Starts Rent-A-Center (RCII) at Hold; Positioned as 2012 Story

KeyBanc initiates coverage on Rent-A-Center (NASDAQ: RCII) with a Hold.

KeyBanc analyst says, "RCII is an intriguing value stock, positioned to leverage strong free cash flow from its mature store base. Moreover, RCII has recently accelerated growth of several new concepts, its Mexico stores and a store-within-a-store concept called RAC Acceptance. On paper, the returns and expansion opportunities for these concepts are quite compelling. While we are encouraged by management's efforts to invest in growth areas, we believe RCII stock is best positioned as a 2012 story, as the concepts ramp up and become significantly more accretive with time. Furthermore, in the near term, we see potential risk to the 2Q EPS given the strain of higher gasoline prices on the consumer during the quarter."

For more ratings news on Rent-A-Center click here and for the rating history of Rent-A-Center click here.

Shares of Rent-A-Center closed at $31.34 yesterday.

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