Zacks Investment Research upgraded shares of Lender Processing Services Inc. (LPS) from NEUTRAL to OUTPERFORM on August 16, 2012, with a target price of $32.00.
We remain optimistic on Lender Processing following its outperformance on both the top and bottom lines in the second quarter of 2012. We also believe that its technology-driven end-to-end solutions for the mortgage and real estate industries as well as contract renewals will aid in generating a modest business growth, going forward. The company also lowered its risk profile by exiting its unprofitable non-core business lines at the beginning of 2012. Last but not the least management is optimistic on the origination market which is still not fully tapped. Improvement in free cash flow, reduction in debt as well as continued margin expansion enhances the bullish sentiments on the stock. Hence, we upgrade the stock from a Neutral to Outperform recommendation.
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