Q4 beat; CY18 guidance looks conservative
TSYS delivered another beat in Q4, with revenue / adjusted EPS 3% / 4% ahead. Top line growth accelerated 2pp sequentially, supported by value added services for issuers and improving retention for merchants. Given the business momentum and conservatism regarding potential regulatory impacts, we see upside to 2018 EPS guidance. We raise our estimates, largely due to tax reform, and increase our PT to $95, requiring the stock to maintain its 20x forward PE in a year. The stock should ride low double digit earnings growth longer term but we remain Neutral, seeing more attractive opportunities elsewhere in the sector.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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