Goldman Sachs Expects More M&A in Prepaid Space, NetSpend (NTSP) Raised to Neutral

February 21, 2013 1:20 PM EST
Get Alerts NTSP Hot Sheet
Price: $15.98 --0%

Rating Summary:
    4 Buy, 15 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 24 | Down: 17 | New: 14
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Goldman Sachs today upgraded NetSpend (NASDAQ: NTSP) from Sell to Neutral with a price target of $13.00 (from $11.00).

"Our Sell rating on NTSP did not work as the announced acquisition by TSS and better 2013 guidance provided two catalysts that re-rated the shares," said analyst Julio C. Quinteros.

He expects increased focus on M&A in the prepaid space.

"Within our smid-cap coverage, under our M&A framework, we currently rank as 1 Green Dot Corporation (NYSE: GDOT) (Neutral), Higher One Holdings (NYSE: ONE) (sell), and Sapient Corp. (Nasaq: SAPE) (Neutral), which reflects our qualitative assessment of each company's specialized offerings and a quantitative view based on our standardized departmental LBO model," added the analyst.

"At the highest level, we believe that the prepaid space remains an attractive growth area within payments . . . However, we balance our view against an
increasingly competitive environment," he said.

For an analyst ratings summary and ratings history on NetSpend (NASDAQ: NTSP) click here. For more ratings news on NetSpend click here.

Shares of NetSpend closed at $15.81 yesterday.

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