Shares of Total System Services Inc. declined slightly Monday after an analyst cut his earning estimate for next year.
The Columbus, Ga., processor revised its guidance Friday and provided details of the spinoff, expected to be completed Dec. 31, from its majority owner, Synovus Financial Corp.
Anthony Davis, an analyst with Stifel, Nicolaus & Co. Inc., lowered his 2008 earnings estimate for TSYS by 13 cents, to $1.35 a share. In a note published Monday, he attributed most of the drop to a decline in interest income expenses.
By midday Monday, TSYS' shares had dropped 0.18% from Friday's closing price, to $27.99.
Mr. Davis also wrote that its earnings before interest, taxes, depreciation, and amortization would be about $521 million this year and would climb about 4% next year.
"TSYS's enterprise value is 10% below that of peer financial technology companies," he wrote. "To be valued fairly, we think that the stock should trade at around $30-$31."
As a result, Mr. Davis called TSYS the "conspicuously undervalued component" of Synovus' holdings.
