Barclays Maintains an 'Equalweight' on Total System Services (TSS); COF Portfolio Acquisition Implications

Barclays maintains an 'Equalweight' on Total System Services (NYSE: TSS), PT increased from $16 to $17.

Barclays analyst says, "In our view, TSS' platform likely provides greater scale efficiencies and better economics, especially given Capital One's (NYSE: COF) enhanced pricing power. Assuming that COF purchases HSBC's entire card portfolio (including the Visa (NYSE: V) and MasterCard (NYSE: MA) portfolio, as well as private label), we estimate a potential post-acquisition COF card portfolio consisting of nearly triple the accounts on file, which when combined with a slightly higher number of transactions processed, could serve to double the revenues provided by COF (potentially boosting TSS' total revenue by ~4% to 6%)."

...with near-term EPS upside likely driven by an accretive acquisition and/or share repurchases and potential EPS upside from a possible HSBC conversion, we believe there may be upcoming catalysts to support near-term upside for shares."

For more ratings news on Total System Services click here and for the rating history of Total System Services click here.

Shares of Total System Services closed at $18.78 yesterday.

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