Markets & Finance

CS First Boston Trims First Data to Neutral


CS First Boston downgraded First Data (FDC) to neutral from outperform.

Analyst Dris Upitis says he cut on growth and margin concerns. In the Payment unit, he estimates foreign exchange, acquisitions, and investment gains contributed 5% to 7% to revenue growth. He calculates investment gains may be contributing 2% of growth and 300 basis points in operating margin, which may be blurring the reality of Western Union's current level of growth and profitability.

He notes the company's merchant-alliance structure may encounter its first real challenges. Also, TeleCheck continues to weigh on profitability and there's a mix shift toward lower-revenue debit cards. Upitis cut the $2.45 2005 EPS estimate to $2.38 and set a $42 target.


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