UPDATE: Citigroup Raises PT on Total System Services on Multiple Catalysts Ahead
In a report published Tuesday, Citigroup analyst Ashwin Shirvaikar reiterated a Buy rating on Total System Services (NYSE: TSS), and raised the price target from $31.00 to $33.00.
In the report, Citigroup noted, “We reiterate our Buy on TSS and raise our price target to $33 from $31. The set-up is favorable, in our view, given the steady stream of emerging catalysts over the next several quarters, including: (i) Client conversions that lead to a higher Accounts-On-File (AOF) count, (ii) Easier comps, (iii) Removal of negative cost drags as TSS' investment in newer processing systems ends by 1Q14, (iv) Debt pay-down, (v) Return to share repurchases, (vi) Possible higher dividend over time. These are on top of the normal benefit from the secular trend of ‘digitization of money' (more cards, more electronic transactions). Overall, we believe that TSS can generate a higher 14%-17% growth rate on top of a higher 2013 base compared to the historical 11%-13% rate due to the recently completed NTSP acquisition. Lastly, we believe the stock is still attractively valued even though the recent performance has been quite good. Buy TSS.”
Total System Services closed on Monday at $28.07.
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