On Wednesday, Fiserv Inc (NYSE:FI). (NYSE: FISV), a leading provider of payments and financial services technology solutions, received an updated price target from BMO (TSX:BMO) Capital. The firm increased the target to $168 from the previous $163 while maintaining an Outperform rating on the company's stock.
The adjustment follows Fiserv's first-quarter earnings for 2024, which surpassed initial expectations. In response to the strong performance, BMO Capital revised its adjusted EBITDA estimates for Fiserv upward by approximately 1%. The company's first-quarter results, along with a slightly higher forecast for full-year 2024 earnings per share (EPS), indicate steady progress toward achieving Fiserv's projected compound annual growth rate (CAGR) of approximately 16% in EPS through the year 2026.
BMO Capital attributes Fiserv's success to its established presence and scale in distribution, which they regard as a significant competitive edge. The firm anticipates that Fiserv's organic growth will be fueled by a transition to a portfolio that increasingly includes high-quality, technology, and software-enabled products.
Additionally, the firm expects that the average revenue per user (ARPU) will see an increase due to the added value from services across both the Merchant and Financial Solutions segments of Fiserv's business. This projection is based on the company's ability to attach value-added services to its offerings, enhancing its overall product mix.
The recent financial guidance from Fiserv, coupled with BMO Capital's revised price target, underscores the positive outlook for the company as it continues to innovate and grow in the competitive financial technology sector.
InvestingPro Insights
Following the upbeat assessment from BMO Capital, Fiserv Inc. (NYSE: FISV) showcases a strong financial standing with a market capitalization of $91.49 billion, reflecting investor confidence. The company's P/E ratio stands at 27.84, with an adjusted figure for the last twelve months as of Q1 2024 at 29.48. This valuation comes as Fiserv trades near its 52-week high, with a price 97.11% of that peak, suggesting that the market is acknowledging the firm's growth prospects.
InvestingPro Tips reveal that Fiserv has seen a substantial price increase over the last six months, with a total return of 34.6%, and a solid year-to-date return of 16.98%. These figures complement the company's reported revenue growth of 7.07% over the last twelve months, as of Q1 2024. Moreover, analysts predict that Fiserv will be profitable this year, a projection that aligns with BMO Capital's optimistic outlook and the company's ongoing commitment to enhancing its product offerings.
While Fiserv does not pay a dividend, suggesting a reinvestment of earnings back into the company's growth initiatives, the InvestingPro platform offers additional insights with numerous tips for a more comprehensive analysis. For those interested in delving deeper, a visit to https://www.investing.com/pro/FISV can provide valuable information. Use the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and discover the 10 additional InvestingPro Tips that could further inform your investment decisions.
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