On Wednesday, Keefe, Bruyette & Woods (KBW) adjusted its price target for Fidelity National Information Services (NYSE:FIS), a leading provider of financial services technology, increasing the target to $85.00 from the previous $82.00. The firm maintained its Outperform rating on the company's stock.
The revision follows Fidelity National's first-quarter results and recent investor day. KBW cited improved tax rates and a stronger than anticipated contribution from Worldpay, a payment processing subsidiary of Fidelity National, as the primary reasons for the adjustment.
KBW has revised its earnings per share (EPS) estimates for Fidelity National for the years 2024 and 2025. The 2024 EPS forecast has been raised to $4.94, up from $4.71, and the 2025 estimate has increased to $5.50, previously set at $5.35.
The new price target of $85 reflects a price-to-earnings (P/E) multiple of approximately 15 times KBW's estimated EPS for the year 2025. This valuation is based on the firm's confidence in Fidelity National's financial outlook and growth trajectory.
The Outperform rating indicates that KBW expects Fidelity National Information Services' stock performance to be strong and possibly outpace the average market return in the foreseeable future. This rating is a signal to investors that KBW believes the company's stock holds potential for appreciation.
InvestingPro Insights
InvestingPro data shows Fidelity National Information Services (NYSE:FIS) with a market capitalization of $41.3 billion and a high P/E ratio of 99.32 based on the last twelve months as of Q1 2024. Despite a notable decline in revenue growth during the same period, with a -32.0% change, the company's gross profit margin remains strong at 38.04%. Additionally, Fidelity National has experienced a significant price total return of 42.19% over the last six months, closely aligning with Keefe, Bruyette & Woods' positive outlook and revised price target.
InvestingPro Tips highlight that Fidelity National has raised its dividend for 3 consecutive years and has maintained dividend payments for 22 consecutive years, underscoring a commitment to shareholder returns. Analysts are optimistic about the company's prospects, with net income expected to grow this year and 10 analysts having revised their earnings upwards for the upcoming period. Moreover, the company's liquid assets exceed short-term obligations, suggesting a healthy liquidity position.
For investors seeking more insights, there are additional InvestingPro Tips available at https://www.investing.com/pro/FIS. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and discover how these insights can help make informed investment decisions.
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