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Citi has reaffirmed its positive stance on Fiserv (NYSE:FI) (NYSE: FI), a financial services technology company, maintaining a Buy rating and a price target of $187.00.
The endorsement followed Citi's attendance at the Fiserv Forum client conference, where the firm showcased its product pipeline, expected to bolster incremental revenue in the coming years.
The conference highlighted Merchant Solutions as a standout area, with several Financial Solutions products, including Cash Flow Central, STAR/Accel network, and Finxact, indicating potential growth acceleration in this segment. Fiserv's capability to create products that effectively integrate both Merchant and Financial Solutions was also a focal point of the event.
Fiserv's commitment to client-driven product enhancement was evident through the introduction of the Commitment Tracker. This tool is designed to fortify client relationships and ensure the longevity of their products by incorporating client feedback into the development process.
Citi's analyst expressed a strong conviction in the growth prospects of Fiserv, citing the company's ability to leverage its platform to drive product innovation and improve integration.
In other recent news, Fiserv anticipates a non-cash impairment charge of $400 million to $600 million in the third quarter of 2024 due to the expiration of its joint venture with Wells Fargo.
Despite this, the company maintains its medium-term performance outlook, projecting 9-12% organic revenue growth and 14-18% adjusted earnings per share growth for 2025 and 2026. Fiserv also reported a 7% year-over-year increase in second-quarter 2024 revenue, reaching a record $5.11 billion, and a 31% increase in second-quarter earnings.
In addition, Fiserv has entered into a multiyear agreement to continue providing processing services for Wells Fargo's merchant customers beyond the lifespan of their joint venture. In the realm of strategic partnerships, Fiserv expanded its collaboration with PayPal (NASDAQ:PYPL) Holdings, Inc. to enhance the checkout process for U.S. merchants.
Analysts have responded favorably to these developments, with Mizuho Securities maintaining an Outperform rating on Fiserv and BTIG initiating coverage with a 'Buy' rating.
InvestingPro Insights
Fiserv's strong market position and recent performance are reflected in the latest data from InvestingPro. The company's market capitalization stands at an impressive $103.43 billion, underscoring its significant presence in the financial services technology sector. Fiserv's revenue for the last twelve months as of Q2 2023 reached $19.78 billion, with a solid revenue growth of 7.2% over the same period.
InvestingPro Tips highlight Fiserv's strength as a "Prominent player in the Financial Services industry," aligning with Citi's positive outlook on the company's product pipeline and growth potential. The company's stock is "Trading near 52-week high," which corroborates the market's confidence in Fiserv's strategic direction and future prospects.
Moreover, Fiserv has demonstrated a "High return over the last year," with a remarkable 59.04% price total return over the past year. This performance supports Citi's bullish stance and their $187 price target. For investors seeking more comprehensive analysis, InvestingPro offers 8 additional tips that could provide further insights into Fiserv's investment potential.
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