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On Tuesday, Raymond (NSE:RYMD) James financial analysts adjusted their outlook on Global Payments Inc. (NYSE:GPN), increasing the price target from $81.00 to $92.00. The firm maintained its Outperform rating on the stock. The revision follows Global Payments’ first-quarter results, which aligned with analysts’ projections on revenue and earnings. These results had been previously indicated during the announcement of the Worldpay/Issuer transaction in mid-April. According to InvestingPro data, the stock appears undervalued with a P/E ratio of 12.8x and strong financial health metrics. The company has maintained dividend payments for 25 consecutive years, demonstrating consistent shareholder returns.
Global Payments management provided further insights into Worldpay’s operations, highlighting an acceleration in revenue growth since coming under GTCR’s leadership. In addition, despite a modest upward revision due to the weaker dollar, the company has reaffirmed its foreign exchange-adjusted revenue and earnings per share (EPS) forecasts for fiscal year 2025. The company’s revenue grew 4.7% in the last twelve months, with a healthy gross profit margin of 62.9%.
The analyst noted the potential for the Worldpay integration to enhance Global Payments’ standalone mid-term targets, expecting adjusted EPS growth to be in the mid-teens for 2026 and 2027. The report underscored the stock’s current valuation at approximately 5.5 times the estimated pro-forma EPS for 2026, which suggests a favorable risk/reward scenario. However, the analyst acknowledged that significant stock re-rating hinges on management’s successful execution of the Worldpay deal. InvestingPro analysis reveals additional insights about the company’s valuation and growth prospects, with 8 more exclusive ProTips available to subscribers. The company’s comprehensive Pro Research Report provides detailed analysis of its financial health, which currently receives a "GOOD" overall rating.
Global Payments’ commitment to its long-term financial goals, despite the current economic context, signals confidence in its strategic initiatives and operational efficiency. The company’s steady performance and the anticipated synergy benefits from the Worldpay acquisition are key factors underpinning the analyst’s outlook.
Investors and market watchers will continue to monitor the progress of Global Payments as it aims to capitalize on the growth opportunities presented by the Worldpay integration. The company’s ability to meet its adjusted EPS growth targets in the coming years will be a critical measure of its success in executing its strategic plans.
In other recent news, Global Payments Inc. reported its first-quarter earnings for 2025, surpassing analysts’ expectations with an earnings per share (EPS) of $2.82, compared to the forecasted $2.73. The company’s revenue aligned with projections at $2.2 billion, reflecting a 5% growth in constant currency adjusted net revenue. These results underscore the company’s effective cost management and strategic initiatives, including the ongoing Worldpay acquisition. The company also announced plans to invest over $1 billion annually in innovation following the Worldpay transaction, aiming for significant cost synergies and margin expansion. Analysts have shown confidence in Global Payments, with firms like Bank of America expressing positive outlooks regarding the company’s strategic direction. Furthermore, Global Payments is actively executing its transformation agenda, which includes the divestiture of its Issuer Solutions business to streamline operations. The company’s strategic focus remains on expanding its merchant solutions and issuer solutions, contributing to its robust performance despite macroeconomic challenges.
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