UPDATE: Oppenheimer Upgrades Lender Processing Services to Outperform, Names $36 PT on 1Q13 Results

In a report published Friday, Oppenheimer analyst Glenn Greene upgraded the rating on Lender Processing Services

from Perform to Outperform, and named a $36.00 price target. In the report, Greene noted, “After 1Q13 results, we upgrade LPS to Outperform from Perform with a $36 price target. We believe the TD&A business has an attractive growth and profitability outlook, but is underappreciated and masked by the rapid deterioration since FY10 within Default Services. TD&A represents an increasing proportion of revenue growth, profitability (~70% by FY14) and value. Additionally, we are comforted by the recent resolution of most of LPS's outstanding litigation issues and anticipate that cash could start to return to shareholders by 2H13. Current valuation of 6x EBITDA with a 12% FCF yield is highly attractive and should provide downside protection. Our $36 PT represents 8x FY14E EBITDA and is supported by a sum-of-parts analysis.” Lender Processing Services closed on Thursday at $25.91.