Goldman Sachs expects Nvidia ’beat and raise,’ lifts price target to $240
Investing.com -- Fiserv shares cratered sharply on Wednesday following its disappointing third-quarter earnings and outlook, prompting a series of downgrades among Wall Street firms.
After nosediving 44% on Wednesday – the stock’s largest one-day drop ever – shares in the payments firm fell by an additional 3% following the Thursday market open.
The 44% drop came after Fiserv missed quarterly estimates and significantly cut its growth outlook for the second straight quarter.
The company now expects annual revenue to rise 3.5% to 4%, down sharply from its earlier 10% forecast. Adjusted earnings per share are projected between $8.50 and $8.60, compared with the prior range of $10.15 to $10.30.
Third-quarter adjusted EPS came in at $2.04, missing Wall Street’s $2.64 estimate, while revenue of $4.92 billion fell short of the expected $5.36 billion, according to LSEG data.
Fiserv said results were hit by a steep depreciation of the Argentine peso and rising interest rates in Argentina, with weakness across both its merchant and financial solutions divisions.
The company’s new leadership signaled a longer transition period marked by flat near-term revenue and heavier reinvestment, resulting in Goldman Sachs, Morgan Stanley, and Seaport Research Partners all lowering their ratings to Neutral or Equal Weight.
Goldman Sachs analyst Will Nance said the quarter brought a “much larger than expected reset” as management reversed several aggressive pricing actions and disclosed revenue impacts from Argentina that were “much more” than previously communicated.
The bank cut its 2026 EPS estimate by about 30%, citing a smaller revenue base and higher expenses as Fiserv spends to fix years of underinvestment.
“Given these issues and the fact that the company is basically guiding to flat revenue for the next nine months,” analysts said, “we are downgrading shares from Buy to Neutral.”
Morgan Stanley analyst James Faucette made a similar move, cutting the stock to Equal Weight and slashing its price target to $81 from $179. He said the changes under new CEO Mike Lyons and incoming CFO Paul Todd go beyond a typical expectations reset.
“We expect those initiatives will likely require time (at least 3-4 quarters) to begin to have externally measurable impact,” Faucette wrote, adding that “40 years of double-digit EPS growth ends” as the firm shifts to mid-single-digit revenue growth and eventually aims to restore double-digit profit gains by 2027.
Faucette noted that management acknowledged overreliance on short-term pricing tactics, deferred investments, and slower growth in Argentina, which had inflated past results.
Morgan Stanley forecasts 2026 adjusted revenue growth of 2.7% and EPS of $8.27, both down sharply from prior estimates, before a gradual recovery.
Brokerage Seaport Research Partners also downgraded Fiserv to Neutral, calling the third-quarter miss and guidance cut “stunning.”
Analyst Jeff Cantwell wrote that 2026 “will be a transition year” with low-single-digit revenue growth and modest EPS decline, while 2027 remains uncertain.
He added that Fiserv’s new long-term algorithm of mid-single-digit revenue growth and double-digit EPS expansion “is well below many other Fintechs in our coverage universe.”