Sterne Agee Reiterates Buy Rating, $28 PT on Total System Services on NTSP Acquisition

In a report published Wednesday, Sterne Agee reiterated its Buy rating and $28.00 price target on Total System Services

. Sterne Agee noted, “We are surprised by TSS' acquisition of NTSP as we would have expected a merchant processing deal. However, we do see potential synergies and at a minimum, TSS is acquiring a fast-growing, profitable company using low-cost debt while still maintaining a very manageable level of leverage, in our view. We think the deal could be $0.25 to $0.30 accretive in 2014 on a cash EPS basis. We think TSS investors may need some time to digest the deal; we would be buyers on any significant weakness.” Total System Services closed on Tuesday at $23.48.