Total System Services Inc.'s shares received an upgrade last week after the Columbus, Ga., processor said it would lose a customer.
Julio Quinteros Jr., an analyst with Goldman Sachs Group Inc., wrote in a research note published Thursday that TSYS "maintains a focused cost approach to the business that should help preserve earnings and cash flow capabilities."
Mr. Quinteros upgraded the shares to "neutral," from "sell."
"While we expect continued revenue headwinds," from the poor U.S. economy, "not all of this is expected to translate on the bottom line," he wrote.
TSYS gets 26% of its revenue from its foreign operations, which could help offset declines from its U.S. processing businesses, Mr. Quinteros wrote.
The upgrade was made two days after TSYS said JPMorgan Chase & Co. plans to begin processing Washington Mutual Inc.'s consumer card portfolio in-house.
JPMorgan Chase uses a licensed version of TSYS' software to process transactions on its cards, and numerous observers had speculated that it would take on the Wamu portfolio work.
TSYS said the Wamu portfolio accounted for less than 4% of its revenue in the first nine months of this year.
Mr. Quinteros' note did not discuss the JPMorgan Chase announcement.
