Analysts Highlight Global Payments' Widening Gap With Fiserv In Merchant Acquiring

  • Mizuho analyst Dan Dolev reiterated Neutral on Global Payments Inc GPN with a $132 price target reflecting weak and unreliable results.
  • The 3Q 2022 was weak and complicated. Most notably, underperformance in Merchant acquiring vs. Fiserv, Inc FISV is widening. 
  • Issuer growth decelerates again. The "excluding this / including that" analysis is as confusing as ever. 
  • Most notably, GPN changed the goalposts to maintain the 10-11% adj. revenue guidance. 
  • BMO analyst James Fotheringham maintained Outperform and cut the price target from $232 to $224.
  • Following GPN's 3Q22 in-line result, he lowered estimates and target price. 
  • Merchant Solutions suffered from limited travel exposure and slower growth in U.K. and Asia. 
  • GPN expects full-year EPS below its prior guidance range but maintains its outlook for revenue growth. 
  • GPN completed its Silver Lake deal, while its EVO Payments, Inc EVOP acquisition, and NetSpend divestiture are on track to close in 1Q23. 
  • RBC analyst Daniel Perlin reiterated Outperform and the $156 price target.
  • As expected, GPN reported a noisy quarter, given the pre-funding of the EVO acquisition, the upcoming divestiture of Netspend's consumer business, and incremental FX headwinds. 
  • Although aggregate results were broadly in line with Street expectations, the segment performance for Merchant was below his model, while Issuer came in with better margins.
  • He believes numbers will continue to have noise until both EVO's acquisition and Netspend's consumer business close, likely in Q123. He believes investors will begin to re-engage in the name. 
  • Credit Suisse analyst Timothy Chiodo reiterated Neutral and cut the price target from $145 to $135.
  • He hailed the FY22 margin guidance hike, margin beat for the quarter, higher Merchant yield, AOF in the implementation pipeline, and substantial revenue improvement in Spain, Central Europe, and Southeast Asia.
  • Price Action: GPN shares traded higher by 0.19% at $114.48 on the last check Tuesday.
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