JP Morgan Says Buy Global Payments on Weakness

JP Morgan says to buy Global Payments

on weakness if margins are low after the company's 2Q reports on January 5 in a report published this morning. JP Morgan writes, "GPN reports F2Q12 results on Jan 5th (

). We think results will be solid, but the risk/reward seems mixed and a lot will hinge on how management positions the impact of Durbin debit regulation, which we estimate could be about $0.10 EPS accretive annualized, but margin dilutive by as much as 240bps. Given the stock's relatively low valuation and expected positive EPS revisions, the stock should be up on the results. But, the stock is ultra sensitive to margin change, so we wouldn't be surprised if the stock initially reacts negatively to a cut in margin guidance, even if it's just due to pass-thru accounting. Should the stock be down on the news, we'd recommend buying on weakness." JP Morgan maintains its Overweight rating and $55 price target on Global Payments, which closed yesterday at $47.22.