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Investing.com -- Mizuho upgraded Global Payments (NYSE:GPN) to Outperform on the potential for a material earnings re-rating driven by cost synergies from the Worldpay acquisition and accelerating free cash flow generation.
“We see a confluence of factors that could drive a re-rating,” analysts at Mizuho (NYSE:MFG) said.
The firm estimates the combined business could produce nearly $5 billion in annual free cash flow by 2028, supported by $600 million in cost synergies and stronger earnings from its core merchant acquiring segment.
A planned $9 billion in share repurchases through 2028 could lift earnings per share to $22 that year, implying a 25% compound annual growth rate from 2026.
Mizuho also pointed to improving prospects for organic growth, helped by small-business formation, new point-of-sale products, and a revamped salesforce incentive model.
It expects revenue growth in the merchant segment to reaccelerate above 7% over the medium term.
“Although organic growth has been a drag on the story, we see a path to reacceleration, helped by improving SMB growth tailwinds & self-help initiatives ranging from deploying next-gen POS ’Genius’ to revamped sales force compensation,” analysts added.
Global Payments currently trades at a steep discount to peers, at 6–7 times forward earnings. Mizuho values the stock at 7x its 2027 pro forma EPS estimate, assigning a $114 price target.