On Wednesday, Baird increased its price target on Fiserv (NYSE:FI) (NYSE:FISV) stock to $220 from $210, while maintaining an Outperform rating. The firm highlighted the company's third-quarter performance, noting that earnings before interest and taxes (EBIT) exceeded expectations with revenue nearly matching forecasts. Additionally, Fiserv's earnings per share (EPS) and revenue guidance for the year were revised upwards.
The analyst from Baird expressed a positive view on Fiserv's consistent performance, referring to the company as a "steady grinder." The 2024 EPS guidance was adjusted upward, reflecting anticipated improvements in both revenue and margins. Fiserv's merchant growth was particularly strong, with its Clover payment system reporting a year-over-year increase of 28%, and enterprise revenue and transactions showing acceleration.
Baird's analyst also pointed out the improved quality of Fiserv's earnings, evidenced by a free cash flow (FCF) conversion rate of approximately 141% in the third quarter. This improvement was further supported by the smallest add-backs related to merger, integration, and severance since the acquisition of First Data Corporation.
In summary, Baird's stance on Fiserv is buoyed by the company's ability to consistently increase earnings per share in the mid-teens percentage range and gain market share across various segments. The firm's outlook for Fiserv remains positive, reflected in the raised price target and continued Outperform rating.
In other recent news, Fiserv has demonstrated a robust financial performance, with its third-quarter results revealing a 17% year-over-year increase in adjusted earnings per share (EPS) to $2.30, and a 7% growth in adjusted revenue to $4.9 billion.
he company's Merchant Solutions segment displayed a remarkable 24% organic revenue growth. This performance has led Fiserv to raise its full-year guidance for organic revenue growth to 16%-17% and adjusted EPS to $8.73-$8.80.
Analysts have taken note of this strong performance. Jefferies has raised its price target for Fiserv to $200, maintaining a hold rating. Meanwhile, CFRA has upgraded Fiserv's status from Buy to Strong Buy, raising the price target to $235. Both firms have expressed confidence in Fiserv's strategic execution abilities and future growth prospects.
In terms of new developments, Fiserv has announced a partnership with DoorDash (NASDAQ:DASH), initiated a proof of concept with Walmart (NYSE:WMT), and expanded its Clover offerings. These initiatives are part of Fiserv's efforts to enhance its financial services offerings and improve cash flow management for businesses.
These are the latest developments in Fiserv's growth trajectory.
InvestingPro Insights
Fiserv's recent performance aligns with several key metrics and insights from InvestingPro. The company's market capitalization stands at an impressive $114.96 billion, underscoring its significant presence in the financial services industry. This is further supported by an InvestingPro Tip highlighting Fiserv as a "prominent player in the Financial Services industry."
The company's strong financial health is evident in its revenue of $20.12 billion for the last twelve months as of Q3 2024, with a notable revenue growth of 6.99% over the same period. This growth trajectory is consistent with Baird's positive outlook and the upward revision of Fiserv's revenue guidance.
Fiserv's profitability is also noteworthy, with an adjusted operating income of $5.66 billion and an operating income margin of 28.14% for the last twelve months as of Q3 2024. This robust profitability aligns with another InvestingPro Tip indicating that the company has been "profitable over the last twelve months."
The stock's performance has been particularly strong, with a one-year price total return of 82.16% as of the latest data. This impressive return is reflected in an InvestingPro Tip noting a "high return over the last year." Additionally, the stock is trading near its 52-week high, with the current price at 99.9% of its 52-week high value.
It's worth noting that InvestingPro offers 12 additional tips for Fiserv, providing investors with a more comprehensive analysis of the company's financial position and market performance. These insights can be valuable for investors looking to make informed decisions about Fiserv stock.
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