LPS) was upgraded from Neutral to Outperform following the
its improved risk profile and the encouraging prospects for the
origination market. Margin expansion due to lower debt and improved
free cash flow were other factors that led to the upgrade.
The four year old spin off from Fidelity National Services (FIS)
Lender Processing Services provides integrated technology
and outsourced services to the mortgage lending industry. The
company's products and services span
the entire life cycle of a mortgage, from origination, to servicing,
LPS reported second quarter 2012 adjusted earnings per share of $0.76,
comfortably surpassed the Zacks Consensus Estimate of $0.60. Earnings
per share spiked 36% from the
Our six month target price of $32.00 is based on a 11.7x multiple for
our earnings estimate for 2012. The target price
implies an expected total return of 19.6% over that period.
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