UPDATE: Goldman Sachs Downgrades Lender Processing Services to Neutral on Negative EPS Trends

Goldman Sachs lowered its rating on Lender Processing Services

from Buy to Neutral with a $26 price target. Goldman Sachs commented, "We downgrade LPS to Neutral from Buy as we now anticipate substantially lower refinance and default volume growth in CY13. Our revised assumptions now point to revenue and EPS declines in 2013 and modest growth in 2014. Accordingly, we cut our CY13 EPS by 9.4% to $2.69 (-3.4% yoy) and CY14 by 8.9% to $2.88 (+7.1% yoy). Consistent with these changes, we cut our 12m price target to $26 (from $34), reflecting our revised CY13 P/E multiple of 9.7X (from 11.4X) on lower volume visibility and consistent with the lower end of its historical valuation range given our expectations for 2013." Lender Processing Services closed at $24.11 on Wednesday.