DA Davidson Cuts Price Target on Lender Processing Services (LPS) Following New Guidance
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Price: $37.30 --0%
Rating Summary:
1 Buy, 3 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
1 Buy, 3 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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DA Davidson is maintaining its Neutral rating on shares of Lender Processing Services (NYSE: LPS) but is lowering its price target from $33 to $24 following the release of LPS's new guidance.
The company announced on June 16 that it was cutting its Q2 EPS guidance from $0.79-$0.82 to $0.54-$-0.56. The firm reports that a tough operating environment in both the Default and Facilitation businesses was expected in Q2.
DA Davidson is lowering its Q2 EPS estimate from $0.81 to $0.55 and its FY11 EPS estimate from $3.62 to $3.04. It is also lowering its revenue estimate from $624.4 million to $538.5 million. For FY12, the firm lowered its EPS and revenue estimates from $4.12 and $693.1 million to $3.79 and $643.5 million.
LPS's prior outlook in Default was based on a late Q2 default market recovery, but industry-wide regulatory pressures have kept this improvement from happening. The company also noted weak origination volumes, stating that refinancing transactions nearly stopped in the Month of May.
An analyst at DA Davidson comments, "LPS referenced increasingly high corporate expenses and operating costs related to the recently discussed consent order with regulators and new Frank-Dodd-related requirements. Specifically, the company’s broad appraisal business and its third party oversight expenses are the most affected."
For more ratings news on Lender Processing Services click here and for the rating history of Lender Processing Services click here.
Shares of Lender Processing Services closed at $23.37 yesterday.
The company announced on June 16 that it was cutting its Q2 EPS guidance from $0.79-$0.82 to $0.54-$-0.56. The firm reports that a tough operating environment in both the Default and Facilitation businesses was expected in Q2.
DA Davidson is lowering its Q2 EPS estimate from $0.81 to $0.55 and its FY11 EPS estimate from $3.62 to $3.04. It is also lowering its revenue estimate from $624.4 million to $538.5 million. For FY12, the firm lowered its EPS and revenue estimates from $4.12 and $693.1 million to $3.79 and $643.5 million.
LPS's prior outlook in Default was based on a late Q2 default market recovery, but industry-wide regulatory pressures have kept this improvement from happening. The company also noted weak origination volumes, stating that refinancing transactions nearly stopped in the Month of May.
An analyst at DA Davidson comments, "LPS referenced increasingly high corporate expenses and operating costs related to the recently discussed consent order with regulators and new Frank-Dodd-related requirements. Specifically, the company’s broad appraisal business and its third party oversight expenses are the most affected."
For more ratings news on Lender Processing Services click here and for the rating history of Lender Processing Services click here.
Shares of Lender Processing Services closed at $23.37 yesterday.
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