Legg Mason Wood Walker Inc. has initiated coverage of the electronic commerce sector, which officials of the firm said they expect to grow 30% or more per year for at least three years.

Officials at the Baltimore-based firm, traditionally strong in asset management and retail brokerage services, said $1.88 billion of venture capital funds went to Internet companies in 1997, more than double the $872 million invested the year before.

"The issue of whether the Internet is a viable commerce channel is no longer in question," said Pawan K. Malhotra, senior analyst at Legg Mason. "It's just a matter of how fast this thing is going to grow."

Legg Mason initiated coverage of Checkfree Corp. with a "buy" rating for its market position in home banking and electronic bill presentment services.

Mr. Malhotra set a 12- to 18-month price target of $38 per share. Checkfree closed Friday at $24.25.

Mr. Malhotra also began covering Concord EFS Inc., another "buy," citing its strength in processing credit and debit card transactions at supermarket chains, where card-based volume is growing.

He said the company also is in a good position to capitalize on the federally mandated move to develop electronic benefits transfer programs by 2002.

Concord EFS' 18-month stock price target is $26, compared with Friday's close at $22.25.

He also rated the stock of First Data Corp., the card processing giant, an "outperform" and Paymentech Inc. a "market perform."

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