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Playing The Payment Processor Space? Here's One Strategy To Use

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Playing The Payment Processor Space? Here's One Strategy To Use
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This week, one Wall Street analyst specified his positions on the top payment processor companies.

Bulls

Here are the stocks CLSA decided to upgrade or remain at a Buy rating.

Heartland Payment Systems (NYSE: HPY): CLSA Investment Banks analyst Tom McCrohan has rated Heartland a buy alongside a price target of $65. According to McCrohan, Heartland's "organic processing growth" has increased 10 percent mainly due to productive sales force, increasing same-store sales and product developments.

Visa Inc. (NYSE: V): Visa was initiated at Market Outperform with a price target at $77. McCrohan believes that a 10 percent growth in revenues for Visa is achievable and thinks that commercial payments are undervalued.

The stock has increased almost 35 percent over the past year.

MasterCard Incorporated (NYSE: MA): McCrohan initiated MasterCard at Market Outperform along with a target price of $105. He expects that long-term "top-line" growth of over 10 percent is attainable.

The payment processor's pre-tax operating margins have increased over 50 percent over the past 4 years, and its stock price has increased 24 percent over the past year.

Vantiv Inc. (NYSE: VNTV): McCrohan also initiated Vantiv at Buy with a price target of $48. The third largest merchant acquirer in the nation, by volume, has accelerated EMV (Europay, MasterCard, Visa).

The stock has moved up almost 24 percent in the past six months.

Total System Services Inc. (NYSE: TSS): This stock was upgraded to Market Outperform with a target price of $46; it's up 28 percent in the past six months.

SEI Investments Co. (NASDAQ: SEIC): Initiated at Market Outperform alongside a price target of $52. The stock is up nearly 23 percent over the course of six months.

Bears

The analyst also downgraded a few companies.

The Western Union Company (NYSE: WU): Western Union has been downgraded to a Sell with a price target lowered to $16 by McCrohan. The company has reduced its consumer-to-consumer (their largest segment) pricings and revenues have declined. The stock is still up nearly 42 percent over the past year.

Global Payments (NYSE: GPN): Downgraded to Market Underperform including a price target of $105. The stock has increased nearly 52 percent over the past year.

WEX Inc. (NYSE: WEX): Initiated at Market Underperform with a new price target of $120. Over the past year, the stock has moved up approximately 22 percent.

Blackhawk Network Holdings Inc. (NASDAQ: HAWK): Initiated at Market Underperform with a price target of $38. The stock has been up nearly 54 percent over the past year.

Latest Ratings for GPN

DateFirmActionFromTo
Nov 2016Compass PointUpgradesNeutralBuy
Nov 2016Stifel NicolausUpgradesHoldBuy
Oct 2016BairdMaintainsOutperform

View More Analyst Ratings for GPN
View the Latest Analyst Ratings

Posted-In: CLSA payment process Tom McCrohanAnalyst Color Long Ideas Short Ideas Analyst Ratings Trading Ideas Best of Benzinga

 

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