NEW YORK (TheStreet) -- Investors should look past Global Payment's (GPN) security breach, which has hurt the company's stock, according to a research report issued Tuesday by Sterne Agee analyst Greg Smith.
While Smith said he has cut the stock's price target from $65 to $58, he anticipates it will snap back from a depressed trading range "as we continue to view the fundamental growth outlook and market opportunity for GPN as attractive."
"[We] expect the stock's multiple ultimately to recover as the company remediates and moves beyond the issue of the data breach," the report noted. The analyst maintains a "buy" rating on Global Payment's shares.
Global Payment was up 2.8% to $47.02 in afternoon trading.Global Payment's shares have been falling since Friday when the credit card processor issued a statement saying an "unauthorized access" into its processing system had exposed 1.5 million card accounts. Following the announcement, Visa (V) dropped Global Payments from its list of approved service providers but said it would review the company's standing in the future. MasterCard (MA), which also said its customers may have been affected, hasn't taken action against Global Payments. On Monday, Global Payments issued first-quarter earnings, showing net income rose to 73 cents per share from 59 cents a year earlier. Analysts were expecting 84 cents. Smith said the cost of the security breach for Global Payments should be limited because it affected few customers. "We estimate that the related expenses to remediate the issue and any penalties or settlement will be in the tens of millions of dollars," the report said.
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