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Investing.com - Keefe, Bruyette & Woods (KBW) has lowered its price target on Shift4 Payments (NYSE:FOUR) to $100 from $110 while maintaining a Market Perform rating on Wednesday.
The price target reduction comes despite KBW raising its earnings estimates for the payment processor to $5.31 per share for fiscal year 2025 and $6.22 for fiscal year 2026, up from previous estimates of $4.95 and $5.34 respectively. The firm cited the Global Blue contribution in the second half of 2025 and fiscal year 2026 as factors behind the increased earnings outlook. The company maintains strong fundamentals with a current ratio of 2.53 and revenue growth of 24% in the last twelve months.
KBW noted that Shift4 shares dropped more than 15% following recent results, a reaction the firm described as "extreme" but "understandable" given management’s communication approach.
The research firm pointed to insufficient details from Shift4 management regarding organic growth potential and key drivers in the second quarter, particularly how these metrics compare to assumptions for the second half of the year and align with the full-year outlook of 20%+ organic growth.
While KBW acknowledged the stock appears inexpensive based on stated fundamentals, the firm indicated it needs additional clarity on the growth outlook before becoming more positive on the shares. InvestingPro analysis suggests the stock is currently undervalued, with 12 additional exclusive insights available to subscribers. Access the comprehensive Pro Research Report for deeper analysis of Shift4’s financial health and growth prospects.
In other recent news, Shift4 Payments reported its Q2 2025 earnings, revealing an earnings per share (EPS) of $1.10, which fell short of the forecasted $1.22. However, the company achieved a significant revenue surprise, reporting $966.2 million against a forecast of $409.79 million. Despite the earnings miss, Shift4 maintained its full-year guidance, including the contribution from its recent acquisition of Global Blue. The acquisition was completed in early July and is seen as a pivotal move for the company. UBS, while maintaining a Buy rating, lowered its price target for Shift4 to $115 from $125, citing concerns over the enterprise ramp. Goldman Sachs reinstated coverage on Shift4 with a Buy rating and a price target of $104, highlighting the company as a top growth story. These developments reflect the mixed sentiment among analysts regarding Shift4’s future performance.
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