Seaport Global Securities downgrades Fiserv stock to Neutral from Buy

Investing.com - Seaport Global Securities downgraded Fiserv (NYSE:FI) stock rating to Neutral from Buy following the company’s third-quarter earnings miss and reduced guidance. InvestingPro data shows this is part of a broader trend, with 7 analysts recently revising their earnings expectations downward for the financial services provider.

The financial technology company announced a significant "reset" across its operations, with management guiding down expectations for 2025 and describing 2026 as a "transition year" for the business.

Fiserv’s management revised its long-term growth algorithm to mid-single digit revenue growth and double-digit adjusted EPS growth, which falls below previous market expectations and underperforms compared to other fintech companies. Despite the recent challenges, the company maintains a "GOOD" overall financial health score according to InvestingPro metrics, with revenue growth of 6.73% over the last twelve months.

The company’s Clover payment platform is experiencing difficulties and will undergo a "prolonged adjustment period," according to the analyst report, which also noted contraction in Fiserv’s Financial segment during the third quarter.

Seaport Global Securities indicated that Fiserv shares, which fell 44% following the announcement, may settle at a "high-single EPS handle" in the near term based on the updated financial outlook. InvestingPro data reveals the stock appears significantly undervalued based on Fair Value calculations, though it trades at a high P/E ratio of 22.48 relative to near-term growth expectations. Investors seeking deeper insights can access the comprehensive Pro Research Report available for Fiserv, one of 1,400+ US equities covered in detail.

In other recent news, Fiserv has experienced a series of analyst downgrades following significant announcements and adjustments in its corporate strategy. The company recently revised its earnings guidance, notably lowering its 2026 earnings per share forecast by approximately 30%, a move that exceeded expectations from firms like Goldman Sachs, which subsequently downgraded Fiserv to Neutral. Morgan Stanley also adjusted its rating from Overweight to Equalweight, citing a strategic overhaul requiring increased investment and a shift in revenue focus. Similarly, TD Cowen downgraded Fiserv to Hold, expressing concerns over a slowdown in business performance and the company’s implementation of a remediation plan. BTIG echoed these sentiments by downgrading the stock to Neutral, pointing out a halved growth outlook and ongoing management changes. Wolfe Research downgraded Fiserv to Peerperform, highlighting structural concerns and a reduced fiscal year 2025 guidance. These developments reflect a broader uncertainty among analysts about Fiserv’s medium-term prospects.

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