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On Monday, BTIG analyst Andrew Harte maintained a Neutral rating on Global Payments Inc. (NYSE:GPN) stock, despite an approximate 11% increase in share value since the company’s third-quarter 2024 earnings report. The $27.89 billion market cap company, which has seen revenue growth of 5.81% over the last twelve months, appears undervalued according to InvestingPro analysis. Harte cited several reasons for the firm’s cautious stance as the company approaches its fourth-quarter 2024 earnings release scheduled for February 13, before the market opens.
Harte pointed out that Global Payments’ management has indicated a tendency towards the lower end of the full-year 2024 guidance, attributing this to macroeconomic challenges affecting the Issuer Solutions segment. This caution is also underpinned by the expectation that there will be no positive revisions to the preliminary full-year 2025 guidance that was previously shared during the company’s Investor Day. InvestingPro data reveals that 12 analysts have revised their earnings downwards for the upcoming period, aligning with this cautious outlook.
Additionally, the BTIG analyst expressed skepticism regarding Global Payments’ ability to accelerate growth in the fiscal year 2026, which is part of the company’s medium-term outlook. According to Harte, it is too early to place confidence in the company’s growth acceleration plans for FY26.
Global Payments’ stock performance has been notable since its last earnings report, but BTIG’s outlook remains guarded as investors await the upcoming financial results on February 13. The firm’s analysis suggests a watchful approach, taking into account the guidance provided by the company’s management and the broader economic environment that could impact its performance. Despite current challenges, InvestingPro indicates the company is trading at an attractive P/E ratio relative to its near-term earnings growth potential. For deeper insights into Global Payments’ valuation and growth prospects, investors can access the comprehensive Pro Research Report, which provides detailed analysis of the company’s financial health and market position.
In other recent news, Goldman Sachs has downgraded Global Payments’ stock rating from Buy to Neutral, adjusting the price target to $122 from $155 due to anticipated downward revisions to the company’s revenue estimates. This change is linked to Global Payments’ strategy involving divestitures and a realignment of its go-to-market approach, which are projected to impact revenue growth. The company expects a slowdown in revenue growth for 2025, primarily due to these strategic changes.
In related developments, an RBC analyst has noted a positive shift in the sentiment of American small and medium-sized businesses (SMBs), potentially boosting technology investments in sectors such as Payments, Processors, and IT Services. This optimism, attributed to decelerating inflation growth, reduced interest rates, and anticipated benefits from fiscal policies, could benefit companies like Global Payments Inc.
Global Payments’ strategy of harmonizing its POS solutions and unifying its go-to-market approach is expected to gain strength from increased SMB investment. These are recent developments that provide investors with a fresh perspective on the potential financial performance of Global Payments in the coming years. However, Goldman Sachs’ revised forecast suggests that these strategic moves could result in a varied revenue growth ranging from a decrease of 1.5% to an increase of 0.7% for the year 2025.
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