Global Payments (GPN) Regains Confidence After Q2 Results, Margin Visibility Low

Global Payments (NYSE: GPN) yesterday reported strong Q2 results with EPS of $0.93, $0.06 better than the analyst estimate of $0.87, on revenue of $588.5 million. Upside was driven by a stronger-than-expected Europe and a lower tax rate, said analysts at Deutsche Bank.

"With GPN close to getting its ROC back from the networks, the company appears to be putting the breach behind it and regaining its confidence," said analyst Bryan Keane.

The upside surprises in Europe offsets a slower Asia, said Keane. Margins were in line, but future margin could be unpredictable.

"Positively, investments could position GPN for greater operating leverage in FY14 as new Asia referral partnerships are cultivated. However, with both N America and Int'l margins bouncing around, future margins are very difficult to predict with confidence," said Keane.

Deutsche Bank reiterated a Buy rating on Global Payments (NYSE: GPN) with a price target of $54.00.

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 $46.07 yesterday.

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