[IMGCAP(1)]
Thomas C. McCrohan, an analyst at Janney Montgomery Scott LLC, cut his rating on Global Payments Inc. to "neutral" from "buy" Thursday and lowered his estimate of the shares' "fair value" by $3, to $45, citing margin compression in the processor's domestic business.

Seven large independent sales organizations sell Global Payments' services to merchants and account for 80% of the Atlanta company's processing revenue, Mr. McCrohan wrote in a note to clients. That gives them enough leverage to force Global Payments to cut its prices, which will reduce margins, he wrote.

The problem will be obscured by Global Payments' recent acquisition of a 51% stake in HSBC Holdings PLC's U.K. merchant acquiring business, Mr. McCrohan wrote.

He estimated that the deal will generate $240 million of revenue for Global Payments this fiscal year.

Excluding that income, he expects revenue growth to slow to the "high single digits" from the high teens.

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