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On Tuesday, Jefferies analyst Trevor Williams updated the firm’s outlook on Fidelity National Information Services (NYSE:FIS), increasing the price target to $80 from $75, while maintaining a Hold rating on the stock. According to InvestingPro data, FIS currently trades at $75.89, with analysts’ targets ranging from $72 to $113. The company maintains a "Fair" overall financial health score of 2.33 out of 5, with particularly strong cash flow metrics. Williams noted that the first-quarter performance was not as straightforward as previously anticipated based on the preliminary announcement. The observed upside in Banking was largely attributed to non-recurring factors, coupled with an unexpectedly substantial miss in segment-level margins. Despite these challenges, InvestingPro analysis shows FIS achieved a perfect Piotroski Score of 9, indicating strong financial health, while maintaining a gross profit margin of 37.56%.
Williams expressed concern regarding the second-quarter guidance, which forecasts lower earnings before interest, taxes, depreciation, and amortization (EBITDA). The analyst believes that the full-year guidance leaves little room for error. For the company to meet its annual targets, it will require a notable acceleration in Banking growth in the second half of the year, along with a significant turnaround in margins.
The analyst’s commentary pointed out the challenges Fidelity National Information Services faces in achieving its full-year guidance. The need for Banking growth to pick up pace in the latter half of the year and for margins to improve significantly was emphasized as crucial for the company’s financial outlook.
Fidelity National Information Services, which provides a range of financial services technology, has been under scrutiny by investors as they assess the company’s performance and future potential. The updated price target by Jefferies reflects a nuanced view of the company’s recent earnings and guidance.
Investors and market watchers will likely monitor Fidelity National Information Services closely in the coming months to see if the company can address the challenges outlined by Jefferies and meet its financial targets for the year. The company has maintained dividend payments for 23 consecutive years, currently offering a 2.04% yield. InvestingPro subscribers can access 6 additional exclusive tips and a comprehensive Pro Research Report, providing deeper insights into FIS’s valuation and growth prospects among 1,400+ top US stocks.
In other recent news, Fidelity National Information Services Inc (FIS) reported its Q1 2025 earnings, with an adjusted EPS of $1.21, slightly surpassing the forecast of $1.20. The company reported revenue of $2.5 billion, which fell just short of the anticipated $2.51 billion. Despite the earnings beat, the company maintained its full-year guidance, projecting Q2 adjusted revenue growth between 4.2% and 5%. Fidelity National Information Services has also announced a strategic acquisition of Global Payments (NYSE:GPN) Issuer Solutions, which is expected to close in the first half of 2026. This acquisition, valued at $12 billion, is anticipated to be accretive to adjusted EPS and EBITDA margins within the first twelve months. Additionally, the company plans to sell its 45% stake in Worldpay to Global Payments for $6.6 billion, enhancing its financial profile. In terms of analyst activity, there were no specific upgrades or downgrades noted. The company continues to focus on recurring revenue streams, which have shown growth from 2% to 4%.
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