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Wednesday, Stephens analysts increased the price target on Fidelity National Information Services (NYSE:FIS) to $100 from $90, while maintaining an Overweight rating. Currently trading at $75.89, InvestingPro analysis suggests the stock is slightly undervalued. The firm’s positive stance comes after the company’s first-quarter results aligned with the pre-announcement on April 17, 2025, and management reaffirmed the full-year 2025 outlook. With revenue of $10.19 billion in the last twelve months and a market cap of $39.9 billion, FIS has demonstrated solid performance. Additionally, the company provided further details on the recently acquired Issuer business.
The analysts noted that Fidelity National Information Services had successfully launched the three transactions that were delayed in the fourth quarter, which bolsters the prospects for a 200 basis points acceleration in Banking revenue in the second half of the year. This is further supported by strong retention and bookings data from 2024. With a gross profit margin of 37.03% and expected earnings per share of $5.77 for FY2025, they anticipate sequential margin improvement throughout the year, citing easier comparisons in the second half of 2024, a favorable shift in the mix of business, and benefits from cost-saving initiatives.
The report also highlighted management’s optimistic remarks regarding demand and the Issuer deal, emphasizing a robust IT spending environment and potential revenue and cost synergies from integrating credit issuance solutions with existing debit offerings. The acquisition is expected to enhance the company’s earnings visibility and solidify its financial position.
In their commentary, Stephens analysts reiterated their Overweight/Volatile rating, pointing to the company’s appealing valuation, which stands at 10 to 10.5 times projected 2026 EBITDA. They also underscored the solid demand environment and the strong visibility of earnings as key factors supporting the positive outlook for Fidelity National Information Services, especially after the integration of the Issuer acquisition. InvestingPro data reveals the company has maintained dividend payments for 23 consecutive years, with a current dividend yield of 2.11%. For deeper insights into FIS’s financial health and growth potential, including 8 additional ProTips and comprehensive analysis, check out the Pro Research Report available on InvestingPro.
In other recent news, Fidelity National Information Services (FIS) reported its Q1 2025 earnings, with an adjusted EPS of $1.21, slightly above the forecast of $1.20. The company generated revenue of $2.5 billion, which was just below the anticipated $2.51 billion. Despite the earnings beat, full-year guidance remains unchanged, with expectations for a 4.2% to 5% growth in adjusted revenue for Q2. Jefferies analyst Trevor Williams has updated the firm’s outlook on FIS, raising the price target to $80 from $75 while maintaining a Hold rating. Williams highlighted challenges in achieving full-year guidance due to the need for accelerated banking growth and improved margins in the latter half of the year. The company’s strategic acquisition of Global Payments (NYSE:GPN) Issuer Solutions and the sale of its Worldpay stake are expected to strengthen its financial profile. FIS returned $670 million to shareholders in Q1, and the company continues to focus on recurring revenue streams to bolster its financial standing.
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