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On Thursday, Barclays (LON:BARC) analyst Ramsey El-Assal reaffirmed an Overweight rating and a $110.00 price target on shares of Global Payments (NYSE:GPN). This aligns with the broader analyst consensus, as shown by InvestingPro data, with price targets ranging from $85 to $194. The endorsement comes as the company undergoes significant restructuring, announcing the divestiture of its Issuer Solutions business to FIS and the acquisition of Worldpay from GTCR and FIS.
Global Payments is set to reposition itself as a dedicated merchant solutions provider, extending its reach across the entire customer spectrum. With current revenues of $10.1 billion and a healthy gross profit margin of 63%, the acquisition of Worldpay is particularly strategic as it brings e-commerce and enterprise capabilities, complementing Global Payments’ traditionally small to medium-sized business-focused customer base. Additionally, it opens doors to new markets such as France, the Nordics, the Middle East and Africa, and Japan.
Despite these strategic moves, Global Payments faces a period of uncertainty. The company has marked fiscal year 2025 as a transition year, aiming to integrate its various products and capabilities. While Global Payments reported a slight beat in its first-quarter earnings, broader macroeconomic concerns continue to weigh on investor sentiment.
Global Payments’ stock experienced a significant drop on Thursday, falling approximately 16.5% as of 12:49 pm, in contrast to the S&P 500’s modest gain of around 0.5%. Barclays views the sell-off as somewhat overstated. El-Assal suggests that as Global Payments achieves integration milestones over time, the stock could potentially return to its pre-deal valuation levels.
In other recent news, Global Payments announced a significant transaction involving the sale of its Issuer Solutions business to FIS for $13.5 billion and the acquisition of Worldpay for $24.5 billion. This strategic move is set to position Global Payments as a major player in the merchant processing industry, with expected pro forma adjusted net revenue of approximately $12.5 billion and adjusted EBITDA of about $6.5 billion. The company anticipates annual cost synergies of $600 million and revenue synergies of at least $200 million within three years post-closing. Additionally, Evercore ISI began coverage on Global Payments with an In Line rating and a price target of $85.00, noting the challenges and potential growth opportunities associated with the company’s transformation efforts. In a separate development, Global Payments’ Chief Human Resources Officer, Andréa Carter, announced her resignation to pursue a new opportunity, effective March 31, 2025. The company has not yet disclosed a successor for the CHRO position. These developments reflect Global Payments’ ongoing strategic reshaping and focus on expanding its capabilities in the payment processing industry.
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