On Tuesday, Evercore ISI increased its price target on shares of Fidelity National Information Services (NYSE:FIS) to $80.00, up from the previous target of $75.00. The firm maintained an In Line rating on the stock.
Fidelity National Information Services recently reported a 3% adjusted revenue growth from continuing operations for the first quarter of 2024, which topped the expectations of both Evercore ISI and the consensus, which anticipated a 2% growth. This increase was primarily driven by higher software licensing revenue in the Banking Solutions division, which helped to counterbalance the challenging comparisons due to the March Banking crisis.
The company's adjusted EBITDA for the quarter also outperformed forecasts by 1%, supported by cost efficiencies from its Future Forward initiatives and a favorable revenue mix in its Banking Solutions sector. Despite the company's decision to stop providing quarterly backlog trends, the analyst noted that the first quarter results indicated positive momentum.
Looking ahead, Evercore ISI pointed to the potential for margin expansion and revenue growth acceleration in the Banking Solutions business. The firm also highlighted the increased share repurchase target, which has been boosted by $500 million to a total of $4.0 billion for the year 2024, as a positive factor for future earnings per share.
Evercore ISI has maintained its estimates for Fidelity National Information Services' adjusted EBITDA for the years 2024, 2025, and 2026. However, the firm has raised its adjusted earnings per share (EPS) estimates for the same periods to $5.13, $5.85, and $6.45, respectively, up from the prior estimates of $4.75, $5.40, and $6.00. These revisions were attributed to lower anticipated taxes, increased share repurchases, and a higher earnings contribution from Worldpay.
InvestingPro Insights
Recent analysis from Evercore ISI has shone a light on Fidelity National Information Services, with an increased price target and expectations of revenue growth and margin expansion. Complementing this perspective, InvestingPro data and tips offer additional insights into FIS's financial health and market performance.
InvestingPro Data indicates a market capitalization of $39.56 billion, reflecting the company's substantial presence in the industry. Despite a challenging P/E ratio of -6.29, which may raise eyebrows, the adjusted P/E ratio over the last twelve months as of Q4 2023 stands at 81.08. This suggests that investors are anticipating future earnings growth, which is also supported by a positive revenue growth of 1.05% over the same period.
InvestingPro Tips highlight that FIS has raised its dividend for 3 consecutive years and has maintained dividend payments for 22 consecutive years, showcasing a commitment to returning value to shareholders. Additionally, net income is expected to grow this year, which could justify the company's high earnings multiple and P/E ratio relative to near-term earnings growth.
For readers looking to delve deeper into FIS's financials and forecasts, InvestingPro offers more comprehensive analysis. With the use of coupon code PRONEWS24, readers can access these insights at a discounted rate. Moreover, there are 8 additional InvestingPro Tips available that could further inform investment decisions. These tips, along with real-time metrics, provide a valuable toolset for evaluating the company's prospects and aligning investment strategies with current market conditions.
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