UPDATE - Barclays Upgraded Total System Services (TSS) to Overweight on Core Business Trends; Potential Positive Catalysts Likely

UPDATE - Barclays upgraded Total System Services (NYSE: TSS) from Equalweight to Overweight, price target increased from $17 to $23.

Barclays analysts says, "We are upgrading our rating on TSS based on fundamental improvements and a number of potential positive catalysts on the
horizon. In particular, we see: 1) firming trends in TSS' core issuer processing
business, with accounts on file growth of 13% y/y (marking the second consecutive quarter of positive y/y growth); 2) credit card loan growth in the mid single-digits in 2H11; 3) a high likelihood for EPS upside from capital structure opportunities (with management reaffirming its desire to increase leverage to 2.5-3.0x LTM EBITDA vs current 0.6x for an accretive acquisition; 4) opportunity for a considerable increase in share buybacks; 5) a potential boost to issuer processing revenues related to COF's recent bid to acquire HSBC's U.S. credit card portfolio; and 6) pricing benefits in TSS' merchant services business from the ~50% decrease in debit interchange."

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