On Tuesday, Evercore ISI announced the addition of Fiserv (NYSE:FI), Inc. (NYSE:FISV) and Euronet Worldwide (NASDAQ:EEFT) to its Tactical Outperform (TAP) List. Fiserv's price target has been set at $200.00, with expectations that the company will surpass consensus earnings per share (EPS) estimates for the second quarter of the calendar year 2024 (2Q/CY24).
The firm's optimism is driven by the anticipated growth in revenue from Clover, Fiserv's payment platform, which is expected to increase by 25-30% year-over-year, propelled by higher value-added services (VAS) penetration.
The upgrade for Fiserv also considers the company's performance in April and May, where the Fiserv Small Business Index indicated an acceleration from the first quarter of 2024. Clover is projected to see a volume growth of over 20% in 2Q/CY24, up from 19% in the previous quarter.
Evercore ISI highlighted the potential for Clover's VAS penetration to expand, especially with the growth in Clover Capital and Fiserv's deeper engagement in the restaurant sector. Moreover, Carat, Fiserv's solution for enterprise merchants, is expected to contribute to growth after moving past the loss of a major client.
For Euronet Worldwide, the price target has been raised to $140.00 from $138.00. The firm foresees Euronet outperforming the consensus EPS estimate by 5% and the top end of its full-year 2024 guidance by 3%. This prediction is supported by strong performance in the Electronic Funds Transfer (EFT) segment, particularly with ATM processing.
Travel trends from the US to Europe have shown a 7% increase in the first two months of the second quarter, which is likely to enhance Euronet's ATM revenue and earnings during the peak summer travel season.
Euronet's growth prospects are also bolstered by the positioning of its ATMs in Europe and the expected continued increase in travel-related demand. Furthermore, with wage inflation in Europe outpacing general inflation, European consumers have greater spending power for travel.
A stronger US dollar is anticipated to increase the number of US travelers using Euronet's ATMs, potentially leading to a rise in dynamic currency conversion transactions, which offer higher margins due to foreign exchange conversions.
In other recent news, Euronet Worldwide reported a record-breaking first quarter in 2024, with revenues of $857 million and a 47% rise in adjusted earnings per share to $1.28. The company also completed the acquisition of the MEPS ATM network from Payments Network Malaysia Sdn Bhd, further solidifying its position as the largest non-bank ATM operator in Malaysia.
In addition, Euronet expanded its board with the appointment of Sergi Herrero, who brings extensive experience from the payment and technology sectors. Herrero's experience includes his current role as Chairman of the Board at Intix and a past role as Global Director of Payments and Commerce at Meta (NASDAQ:META).
Analysts have responded positively to these developments, with Citi raising its price target from $120.00 to $135.00 and maintaining a Buy rating. DA Davidson also increased its price target from $126 to $136, reiterating a Buy rating. Wolfe Research upgraded Euronet's stock rating from Underperform to Peer Perform, acknowledging the company's strategic diversification efforts.
These recent developments are part of Euronet's ongoing expansion and solid financial performance, highlighting its potential for continued growth in the global payment network.
InvestingPro Insights
As Euronet Worldwide (NASDAQ:EEFT) garners a favorable outlook from Evercore ISI, InvestingPro data and tips provide a deeper financial perspective on the company. With a market capitalization of $5.07 billion and a P/E ratio of 18.38, Euronet shows stability in its valuation metrics. Notably, the company's P/E ratio has adjusted down slightly to 17.74 over the last twelve months as of Q1 2024, indicating a potentially more attractive valuation for investors considering near-term earnings growth.
InvestingPro Tips suggest that while management's aggressive share buybacks signal confidence in the company's future, analysts have tempered expectations with downward revisions to earnings for the upcoming period. Despite this, the company is still expected to be profitable this year and has been profitable over the last twelve months, which aligns with Evercore ISI's positive outlook. Moreover, Euronet does not pay a dividend, which may be relevant for investors seeking capital gains over income.
For those looking to delve further into Euronet Worldwide's financials and future prospects, InvestingPro offers additional tips and metrics. Subscribers can access these insights and more by using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With several more InvestingPro Tips available, investors can gain a comprehensive understanding of Euronet's financial health and market position.
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