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On Wednesday, Raymond (NSE:RYMD) James maintained a positive outlook on Fiserv (NYSE:FI) shares (NYSE: FISV), raising the price target from $236.00 to $263.00 while keeping an Outperform rating. The stock, currently trading at $229.53 with a market capitalization of $130.25 billion, has shown remarkable momentum, as revealed by InvestingPro data, with a 48.61% return over the past year. The adjustment follows Fiserv’s fourth-quarter earnings, which revealed a slight earnings per share (EPS) beat of approximately 1% and organic revenue that exceeded analyst expectations by around 50 basis points (bp). Despite revenues being slightly below forecasts due to foreign exchange impacts, the company’s performance was strong, particularly with its Clover payment system, which saw revenue growth accelerate by 100 bp to 29%.
The financial technology company also provided an encouraging initial outlook for 2025, forecasting organic revenue growth of 10-12%, which is roughly 200 bp above analyst projections. The adjusted EPS forecast was in line with expectations, influenced by higher interest expenses. According to InvestingPro data, Fiserv maintains strong fundamentals with a 61.06% gross profit margin and has demonstrated consistent revenue growth, achieving a 27% CAGR over the past five years. Confidence in the new CEO, Michael Lyons, was expressed by Raymond James, anticipating that the management team will continue to achieve mid-term goals.
The analyst noted that although Fiserv’s stock has experienced a significant re-rating over the past two years, with its relative price-to-earnings (P/E) ratio to the S&P 500 Equal Weight index increasing by 45%, the shares are still considered attractively priced. Trading at approximately 19 times Raymond James’ projected 2026 EPS, Fiserv is expected to sustain mid-teens or higher EPS growth. The firm believes that the risk/reward balance for Fiserv’s stock remains favorable and anticipates that the share price will continue its upward trend.
In other recent news, Fiserv reported strong fourth-quarter earnings and revenue that exceeded market expectations, with a Q4 earnings per share (EPS) of $2.51 and revenue reaching $5.25 billion. This performance was followed by the appointment of Michael Lyons as the new CEO, taking over from Frank Bisignano. Analysts from BTIG, Compass Point, and Bernstein provided positive feedback on these developments, with BTIG raising the stock price target to $240 and Compass Point maintaining a Buy rating with a $278 target.
Bernstein reiterated an Outperform rating with a $244 target, expressing confidence in the company’s future prospects and the anticipated seamless transition of executive roles. Fiserv’s Merchant Solutions and Financial Solutions segments are expected to drive growth, with an emphasis on expanding digital payments and merchant services. Furthermore, Fiserv provided an optimistic outlook for the fiscal year 2025, forecasting an adjusted EPS in the range of $10.10 to $10.30.
These recent developments indicate the company’s ability to sustain high-quality growth, with analysts highlighting the robustness of Fiserv’s growth prospects and the company’s commitment to operational excellence. The appointment of Michael Lyons is seen as a positive development, lifting part of the uncertainty surrounding the company’s leadership transition. The new CEO is expected to innovate within the Financial Solutions Segment and drive new growth opportunities for Clover, Fiserv’s point-of-sale and business management system.
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