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On Wednesday, JPMorgan made a notable adjustment to Global Payments (NYSE:GPN) stock, reducing the price target to $85.00 from the previous $115.00, while keeping a Neutral rating on the shares. The stock, currently trading at $79.28, has declined nearly 29% year-to-date. According to InvestingPro analysis, the company appears undervalued compared to its Fair Value, suggesting potential upside opportunity despite recent challenges. The firm’s analysis pointed out that the first quarter results of Global Payments aligned with the preliminary figures released in mid-April. The company’s underlying trends were observed to be healthy and surpassed those of its key competitors, which brought renewed attention to the impending acquisition of Worldpay.
The transaction and volume trends of Global Payments were described as stable within the SMB Merchant sector and showed slight improvements in the Issuer area, despite broader market challenges. The company maintains strong fundamentals with a 63% gross profit margin and $10.1 billion in revenue over the last twelve months. However, within the Merchant segment, there was a noted deceleration in bookings and annual recurring revenue (ARR), which was anticipated as Global Payments navigates a year of transition and anticipates the launch of its Genius product. InvestingPro subscribers can access 8 additional key insights about Global Payments’ financial health and growth prospects.
The discussion during this quarter’s earnings call was largely centered on the upcoming Worldpay acquisition, which was announced less than three weeks prior. The management team provided more detailed expectations regarding potential revenue and operating expense synergies. They emphasized the complementary aspects of the two companies’ portfolios, a view that JPMorgan concurred with. Nevertheless, the firm expressed caution about predicting accelerated growth for the merged entity due to the complex nature of the integration and the need for a clearer understanding of the measures being taken to enhance Worldpay’s growth trajectory.
Investors and analysts alike are keen to gain further insights from Global Payments’ management, which will be presented at the upcoming JPMorgan Global TMC Conference in Boston on May 13, 2025. The conference is expected to shed more light on the strategic direction and potential benefits of the Worldpay acquisition. With a P/E ratio of 12.8x and strong free cash flow yield of 15%, the company’s financial metrics warrant close attention. For comprehensive analysis and detailed valuation metrics, investors can access the full Pro Research Report available on InvestingPro.
In other recent news, Global Payments Inc. reported its Q1 2025 earnings, exceeding analysts’ expectations with an earnings per share (EPS) of $2.82, compared to the projected $2.73. Revenue for the quarter was in line with forecasts at $2.2 billion, reflecting a 5% growth in constant currency adjusted net revenue. Additionally, Raymond (NSE:RYMD) James financial analysts have raised their price target for Global Payments from $81.00 to $92.00, maintaining an Outperform rating on the stock. The company is also progressing with strategic initiatives, including the integration of Worldpay, which is expected to contribute to mid-teens EPS growth in 2026 and 2027. Global Payments’ management has reaffirmed their foreign exchange-adjusted revenue and EPS forecasts for fiscal year 2025. The company’s strategic focus and effective cost management have been highlighted as key drivers of their recent financial performance. Investors remain attentive to the integration of Worldpay and the anticipated synergies that are expected to enhance Global Payments’ long-term financial goals.
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