Barclays Maintains an 'Equalweight' on Total System Services (TSS); Catalysts May Drive Momentum, Fundamentals Showing Mild Improvement

Barclays maintains an 'Equalweight' on Total System Services (NYSE: TSS) price target of $17.00.

Barclays analyst says, "TSS reports 2Q11 earnings next week on 7/26. We expect results to reflect continued improvements in the core business environment as consumer credit declines continue to moderate and card issuers refocus on new account acquisitions and activations. At 15x our 2012 EPS estimate (representing a slight premium to our current 12-month price target) and 6.7x FY 2012E EV/EBITDA (a slight premium to the LTM historical average), we believe shares reflect a modest improvement in fundamentals, with certain headwinds to the quarter (absence of termination fees, Bank of America Merchant Services de-conversion) already known to the market. That said, as discussed in recent notes titled "Thoughts on Potential Uses of Capital; Possible Catalyst on the Horizon" (6/8/11) and "COF Portfolio Acquisitions" (7/7/11), we see an increasing likelihood of positive catalysts providing an incremental near-term lift to earnings."

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 $18.17 yesterday.

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