The Zacks Analyst Blog Highlights: American Express, Discover Financial Services, MasterCard, Visa and DISN Network
CHICAGO, April 11, 2012 /PRNewswire via COMTEX/ --
Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include American Express Co. (NYSE: AXP), Discover Financial Services (NYSE: DFS), MasterCard Inc. (NYSE: MA), Visa Inc. (NYSE: V) and DISN Network Corp. (Nasdaq: DISH).
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Here are highlights from Tuesday's Analyst Blog:
AmEx-TNS Simplify eCommerce
In a bid to establish user-friendly online payment functionality, last week American Express Co. (NYSE: AXP) announced its alliance with Transaction Network Services (TNS) to launch a new payment service provider solution - American Express Payment Gateway - which would offer a single platform for all-sized merchants. This service has been initially launched in the US, UK, Australia and Mexico.
The new solution will enable quick and easy eCommerce facilities through a secure pathway, thereby averting fraudulent practices and keeping card data security intact. The latest solution paves the way for global payment acceptance with multi-currency enablement in over 120 global currencies and major local acquirer connectivity.
The solution will also deliver value-added services such as Accertify's fraud management solution, which was launched in 2007 and acquired by AmEx in November 2010. American Express Payment Gateway also has the capability to verify the authenticity of the cardholder with the help of TNS' tokenization solution.
We believe that the American Express Payment Gateway's secure payment service solution should be able to provide incremental business opportunities to AmEx, as it complements the merchants' payment needs on a broader scale. Generating this service solution with the help of TNS further enables a superior quality security initiative, which is needed in the rapidly evolving eCommerce field.
Meanwhile, AmEx is scheduled to release is first quarter 2012 earnings results after the closing bell on April 18, 2012. The Zacks Consensus Estimate for the first quarter is currently pegged at $1.00 per share, up about 3% year over year. Of the 19 firms covering the stock, 2 raised their estimates in the last 30 days, while no downward revision was witnessed.
Fundamentally, AmEx has been driving its growth profile through improved credit quality. Alongside, the company has been upgrading its digital payment platform through strategic alliances, which will not only expand the company's card membership base but will also help it penetrate the unexplored market and tap the upcoming opportunities in the field of eCommerce.
These factors are also strengthening AmEx's competitive leverage against arch rivals such as Discover Financial Services (NYSE: DFS), MasterCard Inc. (NYSE: MA) and Visa Inc. (NYSE: V).
Although increasing regulatory compliances, low interest rates and higher expenses are weighing on the net interest income and margins, our long view on AmEx remains firm. Hence, based on the company's strong long-term organic growth drivers, the Zacks Rank for AmEx currently stands at #2, implying a short-term Buy and a long-term Neutral stance.
A Boon for DISH Network
Satellite pay-TV service provider DISN Network Corp. (Nasdaq: DISH) recently received a shot on its arm as Standard & Poor's Ratings Services (S&P) raised its outlook on the company from Stable to Positive. The reason for this upgrade was the proposed wireless network strategy of DISH Network. At present, S&P rates DISH Network at BB-, which is still three notches below the investment grade territory of the rating agency.
Earlier this year, DISH Network acquired 40 MHz S-band wireless spectrums through acquisitions of TerreStar Networks Inc. and DBSD North America Inc. Additionally, the company itself owns a slot of in-high-demand 700 MHz wireless frequency. DISH network has decided to deploy a nationwide ground based 4G LTE wireless network using the satellite airwaves.
According, management applied to the Federal Communications Commission (FCC) a waiver for a mobile phone and wireless broadband network. The FCC, however, delayed its decision suggesting that the regulatory agency is in process of rulemaking and the final decision will be taken once the rule will be finalized. Nevertheless, the FCC further hinted that it is strategically in favor of freeing different airwaves for mobile phone and Internet network to support the massive spurt of wireless data growth.
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