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Fiserv target raised on bullish outlook by Bernstein

EditorTanya Mishra
Published 2024-10-14, 06:24 a/m
FI
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Bernstein SocGen Group showed a continued positive stance on Fiserv (NYSE:FI) (NYSE: FISV), a financial services technology company, by raising its price target significantly. The new target is set at $244.00, up from the previous $188.00, while reiterating an Outperform rating on the stock.

The optimism from Bernstein follows a recent meeting with Fiserv's management and executive team. The firm expressed increased confidence in Fiserv's strategic direction, especially noting its ability to stand out in the competitive payments industry. Fiserv's approach to integrating its financial solutions and merchant segments, particularly through its new Small and Medium-sized Business (SMB) bundle, was highlighted as a key differentiator.

Bernstein's reinforced bullish view on Fiserv is backed by a comprehensive analysis contained in a 50-page slide deck. This deep dive into the company's offerings and market position was shared following the analyst's engagement with Fiserv's leadership last week in Las Vegas.

The positive remarks from Bernstein underline Fiserv's efforts to innovate and stay ahead in a market that is often concerned with commoditization and intense competition. The company's focus on synergizing its various services appears to be resonating with analysts looking for growth and sustainability in the payments sector.

The raised price target and sustained Outperform rating reflect the firm's belief in Fiserv's potential to continue thriving in the evolving payments landscape. This endorsement from Bernstein could be a signal to investors of the company's robust strategy and potential for future growth.

Fiserv recorded a 7% year-over-year increase in its second-quarter 2024 revenue, reaching a record $5.11 billion, and a 31% rise in second-quarter earnings. The company anticipates a significant non-cash impairment charge of between $400 million and $600 million in the third quarter of 2024 due to the expiration of its joint venture with Wells Fargo (NYSE:WFC).

However, Fiserv maintains its medium-term performance outlook, projecting 9-12% organic revenue growth and 14-18% adjusted earnings per share growth for 2025 and 2026. In analyst news, RBC (TSX:RY) Capital, TD (TSX:TD) Cowen, BMO (TSX:BMO) Capital, Citi, and Baird all expressed confidence in Fiserv's growth strategy and future prospects, with various adjustments to their price targets.

Fiserv has also entered into a multiyear agreement to continue providing processing services for Wells Fargo's merchant customers beyond the lifespan of their joint venture. Lastly, the company expanded its collaboration with PayPal (NASDAQ:PYPL) Holdings, Inc. to enhance the checkout process for U.S. merchants. These are the recent developments for Fiserv.

InvestingPro Insights

Fiserv's strong market position, as highlighted by Bernstein's analysis, is further supported by real-time data from InvestingPro. The company's market capitalization stands at an impressive $109.59 billion, underscoring its significant presence in the financial services technology sector. Fiserv's revenue for the last twelve months as of Q2 2024 reached $19.78 billion, with a solid revenue growth of 7.2% over the same period.

InvestingPro Tips reinforce Bernstein's optimistic outlook. One tip notes that Fiserv is "Trading at a low P/E ratio relative to near-term earnings growth," which aligns with the company's potential for future growth as emphasized in the analyst's report. Additionally, Fiserv is identified as a "Prominent player in the Financial Services industry," corroborating its strong market position discussed in the article.

The company's financial health is further evidenced by its profitability, with InvestingPro data showing a gross profit of $12.06 billion and an operating income of $5.387 billion for the last twelve months as of Q2 2024. These figures support the analyst's confidence in Fiserv's strategic direction and ability to compete effectively in the payments industry.

Investors seeking more comprehensive insights can access additional InvestingPro Tips, with 11 more tips available on the platform to further inform investment decisions regarding Fiserv.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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