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Earnings Continue to Drive Payments Stocks

As has been seen in the past two weeks, earnings held sway over payments stocks, and the trend held over the latest sessions. Stocks were roughly evenly weighted between gainers and losers.

Total Systems Services said earnings came in at 79 cents a share, beating the Street by two pennies even as revenues met expectations at $1.2 billion.  In the wake of the earnings reports, Guggenheim initiated with a buy recommendation and a $62 price target, while others boosted their own target prices.

PayPal, similarly, gained a bit more than six percent, showing a bottom line for the quarter that came in at 44 cents compared to the Street at 42 cents.  Among the main drivers of growth here was mobile, with for example Venmo showing a doubling in payments volume processed to $6.8 billion.  The total payments volume for the firm came in at $99 billion, up 25 percent year over year adjusted for currency.

Discover Financial Services missed earnings by a penny late in the week, which sent shares down by more than six percent. Beyond the headline miss, net chargeoff rates for cards stood at 2.8 percent, the highest level in three years.

Fleetcor felt the impact of a reiterated short call by Citron Research, which said in a note this past week that the company (as the report was cited by Seeking Alpha) has “developed a deep learning algorithm to intentionally cheat its customers with ‘junk’ fees.’” That information allegedly came from former company employees.

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