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On Wednesday, RBC Capital Markets adjusted its price target for Fidelity National Information Services (NYSE:FIS), a leading provider of financial services technology, moving it to $95.00 from the previously set $104.00. The stock, currently trading at $73.33, has experienced significant pressure recently, with InvestingPro data showing it’s trading in oversold territory. Despite this change, the firm maintained its Outperform rating on the stock. According to InvestingPro analysis, FIS appears undervalued at current levels.
RBC Capital’s analysts cited a less optimistic outlook for the first quarter of 2025 (1Q25) in the banking segment as the primary reason for the price target adjustment. The analysts noted that although Fidelity National Information Services had solid sales momentum carrying over from fiscal year 2024 into fiscal year 2025, with revenue growing at 3.12% in the last twelve months, the guidance for 1Q25 was not as strong as expected. InvestingPro subscribers have access to 12 additional key insights about FIS’s current market position and future prospects. This was attributed to several factors, many of which were deemed nonrecurring, that are likely to result in a slower start to the year. However, there is an anticipation of a ramp-up in activity in the second quarter of 2025 (2Q25) and the second half of the year (2H25).
The analysts remarked that the Capital Markets division remains a strong point for Fidelity National Information Services and is expected to continue driving growth throughout fiscal year 2025. Despite the reduced price target, the analysts expressed confidence in the company’s prospects. They believe that the recent downturn in the company’s stock price is an overreaction and present a buying opportunity for investors.
In the words of the RBC Capital analyst, "Despite solid sales momentum continuing from FY24 into FY25, 1Q25 Banking guidance was disappointing, as several items (many nonrecurring) will cause the year to start slow and ramp into 2Q25 and 2H25, thus dampening the increased visibility expected heading into FY25. Capital Markets remains the bright spot and should continue to drive the bus in FY25. We believe the price action is overdone and would be buyers on the weakness."
Fidelity National Information Services provides a range of financial technology solutions and services, and its performance is closely watched by investors interested in the fintech sector. The company has maintained dividend payments for 23 consecutive years and achieved a perfect Piotroski Score of 9, indicating strong financial health. The latest assessment by RBC Capital Markets suggests that despite near-term challenges, the company’s long-term growth trajectory remains positive. For a comprehensive analysis of FIS’s valuation and growth prospects, investors can access the detailed Pro Research Report available on InvestingPro.
In other recent news, Fidelity National Information Services has been in the spotlight following its fourth quarter 2024 results and guidance for 2025. The company reported a 9% year-over-year increase in annual contract value sales and an adjusted earnings per share upside. However, the company’s guidance for revenue and adjusted EBITDA fell short of expectations, leading to mixed reactions from analysts.
KeyBanc Capital Markets maintained a Sector Weight rating on FIS, noting a blend of positive and negative factors. Similarly, Bernstein analysts maintained a Market Perform rating and an $88.00 price target, while Susquehanna analyst James Friedman downgraded FIS from Positive to Neutral and reduced the price target to $81 from $103. Keefe, Bruyette & Woods adjusted the price target for FIS to $92.00 from the previous $102.00 but kept its Outperform rating, while Stephens analyst Charles Nabhan revised the price target to $90 from the previous $100, maintaining an Overweight rating.
These developments highlight the evolving financial landscape for Fidelity National Information Services and underscore the importance of ongoing performance analysis. As these events unfold, investors are advised to keep a close eye on the company’s financial performance and the insights provided by market analysts.
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