KBW Upgrades Global Payments, Says International Business And M&A Environment Give Upside

In a report published Tuesday, Keefe, Bruyette & Woods analyst Steven Kwok upgraded the rating on Global Payments Inc GPN from Market Perform to Outperform, while raising the price target from $103 to $121. The analyst believes that could be meaningful upside to the stock, driven by operating margin improvement, stronger core growth, as well as M&A activity. The analyst also believes that among the key catalysts to the stock in the near term are the better than anticipated earnings results for F4Q15, along with the robust yet conservative guidance provided for F2016. In addition, the company's key business regions have all been able to sustain robust performance. Global Payments has also been witnessing solid improvement in its operating margins, while continuing to focus on share buybacks and accretive M&A. "While shares of GPN have had a strong run, we believe there is further upside potential at current levels with its F4Q15 earnings and F2016 outlook being a catalyst," Kwok said, adding, "We think GPN's exposure to international markets in the current robust M&A environment could provide opportunities for faster growth over the near to intermediate term."