Citi has reiterated its Buy rating on Global Payments (NYSE: NYSE:GPN) with a steady price target of $145.00. The financial services firm is set to host its first analyst day since September 2021 on September 24, which is generating a positive outlook from industry watchers.
Citi's analysis suggests that the upcoming event could provide clarity on the company's strategy and structure moving forward, as well as an attainable outlook for the medium term.
According to the firm, the analyst day presents a chance for Global Payments to offer greater detail on its sub-segment performance, which could enhance the visibility of the company's growth potential.
The anticipation is that this additional transparency will allow for a better understanding of the company's earnings growth, which Citi believes is more resilient than what the current stock price suggests.
Citi's commentary indicates that the market may currently undervalue Global Payments, and the forthcoming analyst day could correct this by highlighting the company's growth prospects.
The firm points to the potential for a positive re-rating of the stock over time as the market recognizes the strength of Global Payments' earnings growth.
The analyst day is seen as a pivotal event for Global Payments, with the potential to provide investors with a clearer picture of the company's future plans. This could, in turn, lead to a more favorable perception of the stock among investors.
In other recent news, Global Payments reported a 6% increase in adjusted net revenue for the second quarter, reaching $2.32 billion. The Merchant Solutions segment saw an 8% increase to $1.8 billion, while the Issuer Solutions segment experienced a 4% rise to $527 million.
Susquehanna affirmed a positive rating, highlighting the benefits from the integration of EVO, while TD Cowen maintained a buy rating, emphasizing the upcoming Investor Day as a pivotal moment. BMO Capital increased the price target for Global Payments, following a recovery in Merchant Solutions margins, and Stephens revised its price target, noting the company's in-line revenues and margin beat.
InvestingPro Insights
As Global Payments (NYSE:GPN) prepares for its highly anticipated analyst day, InvestingPro data and tips offer valuable insights that align with Citi's positive stance. With a market capitalization of $28.26 billion and a robust gross profit margin of 62.84% over the last twelve months as of Q2 2024, Global Payments demonstrates a strong financial foundation. The company's commitment to shareholder returns is evident in its track record of maintaining dividend payments for 24 consecutive years, coupled with a dividend yield of 0.91% as of late 2024.
InvestingPro Tips highlight that analysts are forecasting net income growth for Global Payments this year, which could be a key factor contributing to the company's resilience in earnings growth mentioned by Citi. Moreover, the stock is trading at a low P/E ratio relative to near-term earnings growth, currently at 20.31, which suggests potential for a positive re-rating as anticipated by Citi. With 17 analysts having revised their earnings downwards for the upcoming period, the analyst day presents a crucial opportunity for Global Payments to address these concerns and potentially sway market sentiment.
For investors seeking more detailed analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/GPN, providing a comprehensive look at Global Payments' financial health and market position. These insights could be instrumental in assessing the company's potential for growth, especially in light of the upcoming analyst event that aims to shed light on the company's strategic direction and growth prospects.
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