UPDATE: J.P. Morgan Reiterates Neutral Rating, Raises PT on CSG Systems International
In a report published Wednesday, J.P. Morgan & Co. reiterated its Neutral rating on CSG Systems International (NASDAQ: CSGS), and slightly raised its price target from $18.00 to $19.00.
J.P. Morgan noted, “CSG is a mature business which grows organically at the rate of the billing and OSS market of 4-6% during normal times. But these have not been normal times. Looking at 2012 the expectation is for flat to down revenue with margin compression causing a faster decline in earnings. While the company has talked about more transformational deals in the pipeline, the sales cycles could be long. We also view Comcast and Time Warner contract negotiations at the end of the year and in March 2013 respectively as major near-term risks for the stock. But the stock looks very cheap on a cash flow basis and we believe once we get past the renewals, we can see the stock bottoming out and potential of expanded growth. Thus we remain Neutral.”
CSG Systems International closed on Tuesday at $17.80.
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Tags: J.P. Morgan & Co.