On Tuesday, Evercore ISI updated its stance on Fiserv (NYSE:FI) (NYSE:FISV), a leading provider of financial services technology solutions, by raising the stock price target to $200 from the previous $185 while maintaining an Outperform rating. The adjustment follows a period of robust growth in the company's Merchant Solutions, particularly among small and medium-sized businesses (SMBs).
The firm's management highlighted that consumer spending has remained resilient, with the Fiserv Small Business Index for April outpacing the average of the first quarter. This trend suggests a positive outlook for the company's SMB Merchant Solutions revenue growth.
In the first quarter of the calendar year 2024, the Merchant Solutions segment reported an 8% growth in small business volume. Still, the adjusted revenue for the segment saw a more significant increase of 16%, which was primarily driven by the growth in value-added services (VAS).
Fiserv has also revised its 2024 adjusted operating margin expansion outlook to more than 125 basis points, an improvement from the previous expectation of over 100 basis points. The company attributes this optimistic projection to better operating leverage and improved productivity.
In the analyst's view, Fiserv remains a top pick, reinforcing the company's position by stating, "Sticking with FISV as our #1 TOP PICK." The new price target of $200 is based on a 19 times multiple of the projected adjusted earnings per share (EPS) for the calendar year 2025, an increase from the 18 times multiple used previously.
InvestingPro Insights
Recent data from InvestingPro underscores the potential of Fiserv (NYSE:FISV) as a solid investment, particularly in light of the company's performance and strategic financial management. With a market capitalization of $91.45 billion and a P/E ratio that stands at 30.75, Fiserv demonstrates a strong position in the market.
The adjusted P/E ratio for the last twelve months as of Q4 2023 is slightly higher at 31.17, indicating a stable valuation relative to earnings.
One of the notable InvestingPro Tips for Fiserv is that management has been aggressively buying back shares, which often signals confidence in the company's future prospects and can be a positive sign for investors. Moreover, analysts have revised their earnings upwards for the upcoming period, reflecting optimism about the company's financial health.
InvestingPro data also shows a significant revenue growth of 7.65% in the last twelve months as of Q4 2023 and a robust gross profit margin of 59.83%, highlighting the company's ability to efficiently manage its operations and maximize earnings.
The company's share price is trading near its 52-week high, with a price percentage of 97.07% of this peak, which can be indicative of strong market sentiment and investor confidence.
For those looking to delve deeper into Fiserv's financials and future outlook, InvestingPro offers additional insights and metrics. To explore these and gain a more comprehensive understanding of Fiserv's investment potential, consider using the exclusive coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 6 additional InvestingPro Tips available for Fiserv that could further inform investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.