Jefferies Raises Price Target on Global Payments (GPN) on Q1 Results

Jefferies is reiterating its Buy rating on shares of Global Payments (NYSE: GPN) and is raising its price target from $50 to $52 following the release of its second quarter results.

The company's revenue for the quarter topped the firms estimate by 1-2 percent due to a $15 million contribution from Durbin. Earnings for the quarter missed expectations by a couple of cents as operating margins came in 100 bps short.

GPN's management team raised its FY12 revenue guidance from $2.1-$2.15 billion to $2.15-$2.2 billion due to Durbin and acquisitions. The firm forecasts more Durbin benefits in fiscal 2013.

An analyst at Jefferies comments, "While N. America revs beat JEFe by 5%, Europe and Asia revs missed JEFe by 7% and 2%, respectively. However, mgmt suggested the int'l performance was about in line with internal plan, and both regions are expected to return to positive q/q growth in F3Q and F4Q, as underlying consumer spending patterns remain intact. The new bank sponsorship agreement in Brazil is a step in the right direction towards tapping into a key emerging payments market longer term, but we don't expect material revs from Brazil in the foreseeable future."

For FY12 and FY13, the firm is raising its EPS estimates from $3.16 and $3.57 to $3.18 and $3.61. Sales for FY12 and FY13 are forecasted to total $2.175 billion and $2.357 billion.

For an analyst ratings summary and ratings history on Global Payments click here. For more ratings news on Global Payments click here.

Shares of Global Payments closed at $47.99 yesterday.

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