Analyst Upgrades Global Payments; Shares Rise

NEW YORK (AP) — Shares of Global Payments Inc. rose Thursday after an analyst upgraded the payments processing and money transfer services provider amid improving currency trends and potential growth from acquisitions.

Robert W. Baird analyst David Koning raised his rating to "Outperform" from "Neutral." He also increased his price target to $41 from $36.

Global Payments shares rose 94 cents, or 2.9 percent, to $33.85 in midday trading, despite a downturn in the broader market.

Koning wrote in a research note that improving currency trends, especially in Canada, stabilizing card volume and potential earnings growth from acquisitions, share repurchases and savings should help the company.

In the near term, Global Payments should benefit from improving currency valuations of the Canadian dollar and British pound, Koning wrote. He added that improving currency could benefit earnings per share by as much as 20 cents.

A strong balance sheet could allow Global Payments to seek out new acquisitions to help bolster revenue and profit and have cash to repurchase stock, which would raise earnings per share, Koning said. For each 1 million shares repurchased, earnings would rise about 2 cents per share, he said.

Recent acquisitions and partnerships in Russia and China should eventually provide some earnings benefit in future years, Koning wrote in the note.

Koning raised his fiscal 2010 earnings estimate to $2.26 per share from $2.20 per share.

Global Payments' fiscal year begins in June.