Total System-Merrick Extend Ties - Analyst Blog
19 Diciembre 2012 - 6:45AM
Zacks
Expanding its merchant services, Total System Services
Inc. (TSS) announced the extension of a long-term
strategic alliance with CardWorks Inc.’s wing, Merrick Bank, the
company’s client for over 7 years now.
The extension of the business pact reflects the market’s
confidence in Total System. The company will continue to serve
Merrick Bank by providing easy and usable solutions to the latter’s
independent sales organization partners. Total System’s service
portfolio also includes point-of-sale solutions, authorization,
settlement, reporting, managed services and risk management
solutions.
Of late, Total System has been investing to become a one-stop
platform for all kinds of merchant and issuer solutions through its
advanced services and technology upgrades. Alongside, the company
has been strengthening its clientele base by offering customized
and flexible processing solutions to all its partners. Such
offerings also helped Total System gain a multi-year contract with
St. Mary's Bank last week. St. Mary’s Bank is the first credit
union in the US and will now gain leverage on its consumer credit
card portfolio from the Total System’s payments services.
Total System has been witnessing improvement in its financials
over the past few quarters based on its steady fundamental growth
initiatives. We believe that its risk-free balance sheet, modest
cash position and cash flow generating capability provide viable
scope for efficient capital deployment. However, risks related to
operating leverage and competitive pressure fromarch-rivals such as
Heartland Payment Systems Inc. (HPY) and
WEX Inc. (WXS) remain eminent.
Based on the pros and cons, the Zacks Consensus Estimate
currently pegs earnings at 33 cents for the fourth quarter of 2012,
up about 6% over the prior-year quarter. For 2012, earnings are
projected to increase to $1.29 per share. This reflects an increase
of about 12.5% year over year, which is slightly higher than the
upper end of management’s guidance of 10–12% growth for 2012. Based
on its influential contracts, management also expects to achieve
the higher-end of its guidance in all growth metrics.
Currently, we maintain a long-term Neutral stance on Total
System with a Zacks #3 Rank, which implies a short-term Hold
rating.
HEARTLAND PAYMT (HPY): Free Stock Analysis Report
TOTAL SYS SVC (TSS): Free Stock Analysis Report
WEX INC (WXS): Free Stock Analysis Report
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