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On Thursday, Keefe, Bruyette & Woods made a positive adjustment to Shift4 Payments (NYSE:FOUR) stock, raising the price target from $112.00 to $125.00. The firm maintained its Market Perform rating on the shares. This move comes in response to Shift4 Payments’ recent Investor Day revelations and a robust financial performance.
The financial institution’s analyst highlighted the company’s strong growth drivers, particularly following the fourth-quarter earnings release. The revised price target reflects a 13x multiple on the enterprise value to 2026 adjusted EBITDA expectations. Keefe, Bruyette & Woods adjusted its 2025 and 2026 Adjusted EBITDA estimates upward to $842.3 million and $994.6 million, respectively, up from previous estimates of $831.7 million and $985.2 million.
During the Investor Day, Shift4 Payments outlined its strategy, emphasizing cross-selling and international expansion opportunities. The company also discussed the continuation of its mergers and acquisitions strategy, which is aimed at expanding distribution and enhancing its cross-selling capabilities.
Management at Shift4 Payments expressed high confidence in achieving high teens organic growth over the next three years, based on current assets. They also noted the potential for further acceleration with recent acquisitions, such as Global Blue. Despite a slightly conservative outlook for 2025, the management’s tone suggested that there is a deliberate conservatism factored into their projections.
In summary, the upbeat investor day and strong underlying growth trends have led to a positive reassessment of Shift4 Payments’ financial outlook by Keefe, Bruyette & Woods. The revised price target of $125 represents the firm’s confidence in the company’s ability to grow and execute its strategic initiatives effectively.
In other recent news, Shift4 Payments reported a strong fourth-quarter performance for 2024, surpassing earnings and revenue forecasts with an earnings per share (EPS) of $1.35 and revenue of $887 million. Despite these positive results, the company’s financial guidance for 2025 fell short of some expectations. Shift4 Payments also announced a major acquisition of Global Blue for approximately $2.5 billion, marking the largest acquisition in the company’s history. This strategic move is expected to enhance Shift4 Payments’ international presence and capabilities in the payment processing sector.
Analysts have responded to these developments with varied perspectives. DA Davidson maintained a Buy rating with a price target of $140, while Raymond (NSE:RYMD) James increased its price target from $115 to $140, maintaining an Outperform rating. However, Benchmark analysts held a Hold rating, reflecting concerns over the company’s recent revenue shortfall and subdued forward guidance. The acquisition of Global Blue is anticipated to generate significant revenue synergies by 2027, according to the company’s projections.
Shift4 Payments’ management has set ambitious mid-term targets, aiming for a high-teens compound annual growth rate (CAGR) in revenue and EBITDA. Additionally, the company announced strategic initiatives for international expansion and new product capabilities. As these developments unfold, investors and analysts will closely monitor the company’s performance and integration of Global Blue.
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