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On Thursday, Bernstein analysts adjusted their outlook on Global Payments (NYSE:GPN) shares by reducing the price target to $95 from the previous $118 while retaining a Market Perform rating. The adjustment follows the company’s first-quarter results, which were largely anticipated due to a pre-release issued on April 17, in conjunction with the FIS/GTCR deal announcement. According to InvestingPro data, the stock has fallen nearly 29% year-to-date, with 13 analysts recently revising their earnings expectations downward for the upcoming period.
The earnings call for Global Payments was used to reaffirm the rationale behind the Worldpay acquisition and to provide updates on the operational transformation currently in progress. In addition, the company offered revised medium-term pro-forma targets for the combined entity of Global Payments and Worldpay, indicating potential accelerating growth. While analysts have expressed caution, InvestingPro data shows the company maintains strong fundamentals with a healthy 63% gross profit margin and has consistently paid dividends for 25 consecutive years.
Despite the stock’s current valuation at approximately 7-8 times clean PE based on 2026 earnings projections, which is considered low, Bernstein analysts have expressed hesitancy in recommending Global Payments as an investment. They highlighted that the company’s stock narrative has largely been centered on capital returns over the past year. The recent transaction, funded by the sale of a stable defensive business, is seen as a complicating factor in the investment thesis for Global Payments. Notably, InvestingPro’s Fair Value analysis suggests the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report covering this and 1,400+ other US equities.
The analysts also pointed out that there are few examples of successful large-scale deals among legacy acquirers. In fact, they noted that most major deals in this sector have historically led to significant underperformance in the years following the transaction. This context suggests that while Global Payments is undergoing strategic changes and targeting growth, analysts are maintaining a cautious stance on the stock’s potential for investment.
In other recent news, Global Payments Inc. has been the focus of several analyst updates following its first-quarter earnings report. BMO Capital Markets adjusted its price target for Global Payments from $107 to $86, maintaining a Market Perform rating due to concerns about execution risks related to the Worldpay acquisition. In contrast, TD Cowen increased its target from $78 to $84, holding a neutral stance while noting the company’s solid performance and stable consumer trends. KeyBanc was more optimistic, raising its target from $80 to $90 and maintaining an Overweight rating, citing favorable macroeconomic conditions and reduced foreign exchange headwinds.
Keefe, Bruyette & Woods also lifted their price target to $81, highlighting the company’s positive volume trends and confidence in its transformation strategy. Meanwhile, JPMorgan lowered its target from $115 to $85, expressing caution about the integration complexities of the Worldpay deal, despite recognizing stable trends in the SMB Merchant sector. Across these analyses, the Worldpay acquisition remains a pivotal focus, with potential synergies and execution risks being closely monitored by investors and analysts. The company’s management is expected to provide further insights at the upcoming JPMorgan Global TMC Conference.
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