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On Tuesday, Citi analysts made adjustments to their valuation of Global Payments stock (NYSE:GPN), lowering the price target to $135 from the previous $138 while continuing to endorse the stock with a Buy rating. The $26.16 billion market cap company is currently trading at $105.63, and InvestingPro analysis suggests the stock is undervalued. The adjustment follows a review of the company's fourth-quarter earnings and an assessment of its current business trajectory.
The analysts noted that the company's situation has not significantly changed since the third-quarter results released in late October, which they view positively, emphasizing the importance of consistency in enhancing stock performance. With revenue of $10.1 billion and a healthy free cash flow yield of 11%, the ongoing business transition at Global Payments is gaining clarity, with more detailed information about initiatives and milestones now available.
In the near term, the analysts highlighted two critical developments for the company: the anticipated rollouts of the Genius POS system in the second and third quarters, and the harmonization of value-added services across the platform by year-end. These steps are part of Global Payments' broader reorientation efforts.
Despite acknowledging the inherent execution risks in any business transition, Citi analysts believe that the potential rewards outweigh the risks at the stock's current levels. They argue that the company's prospects look favorable, especially if it can demonstrate steady underlying revenue and a more disciplined approach to capital allocation. This includes the possibility of further optimization of its portfolio.
Global Payments' commitment to its business transformation and the strategic moves it is making to achieve this, such as the Genius POS launch and service harmonization, are key factors that the analysts believe could drive the stock's performance moving forward. InvestingPro data reveals management's aggressive share buyback program and a 25-year track record of consistent dividend payments, demonstrating strong commitment to shareholder returns. InvestingPro subscribers have access to 6 additional key insights about Global Payments' financial health and growth prospects.
In other recent news, Global Payments (GPN) has been in the spotlight following a series of analyst adjustments and company developments. Bernstein analysts reiterated a "Market Perform" rating on GPN shares, maintaining a price target of $120, despite the company's fourth-quarter earnings revealing a slight miss on both revenue and earnings per share (EPS) estimates. Global Payments also initiated a $250 million accelerated share repurchase program, demonstrating the company's financial strength and commitment to returning value to its shareholders.
Meanwhile, Mizuho (NYSE:MFG) Securities lowered its price target for Global Payments to $100 from $109, maintaining a neutral rating. This adjustment came after GPN's Q4 results, which did not meet market expectations. The firm highlighted concerns about Global Payments' merchant organic growth and the possible underestimation of foreign exchange headwinds in the company's 2025 guidance.
BofA Securities also revised its outlook on Global Payments, reducing the price target to $149 from $156 while retaining a buy rating. This adjustment followed Global Payments' announcement to include stock-based compensation in its adjusted results from Q1 2025. Similarly, Raymond (NSE:RYMD) James adjusted its price target for Global Payments to $122 from $131, maintaining an outperform rating. This followed GPN's Q4 results, which showed earnings per share in line with expectations but slightly weaker revenue.
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