On Thursday, Fiserv Inc . (NYSE:FI) saw its price target increased from $173.00 to $187.00 by Argus, with a maintained Buy rating. The adjustment follows Fiserv's second-quarter earnings surpassing expectations and the company's enhanced financial outlook for 2024.
Fiserv reported adjusted earnings per share (EPS) of $2.13 for the second quarter, a rise from $1.81 in the same quarter last year, and higher than the consensus estimate of $2.10. Contributing to the strong performance was an expansion in operating margins, attributed to effective cost control measures.
In addition to reporting robust quarterly earnings, Fiserv updated its 2024 operating margin expansion goals, now aiming for a minimum of 135 basis points, an increase from the previously stated 125 basis points. This revision comes as part of the company's raised projections for 2024 adjusted EPS, which are now set at $8.65-$8.80, marking an anticipated growth of 15%-17%.
The positive financial results and optimistic future projections have led Argus to revise upward their EPS estimates for Fiserv for the years 2024 and 2025. The firm's confidence in Fiserv is reflected in the newly established price target of $187, which signifies a potential for continued stock appreciation.
In other recent news, Fiserv, a leading provider of payment and financial services technology solutions, has experienced a series of noteworthy developments. The company reported a substantial 31% increase in second-quarter earnings, leading to an upward revision of its full-year profit forecast.
Fiserv's second-quarter processing and services revenue rose to $4.14 billion, while total quarterly revenue increased by 7.4% to $5.12 billion, exceeding estimates. Fiserv also reported earnings of $894 million or $1.53 per share for the quarter ending June 30, marking a significant increase from the previous year.
Several analyst firms have revised their outlook on Fiserv following these results. RBC Capital maintained an Outperform rating and raised the price target to $183, citing Fiserv's geographic diversity and product innovation. Deutsche Bank also raised its price target for Fiserv to $200, reiterating a Buy rating.
BMO Capital maintained its Outperform rating with a consistent price target of $168, while Wells Fargo initiated coverage with an Overweight rating, citing successful execution of mergers and acquisitions.
Despite economic challenges in Argentina impacting Merchant Solutions revenue, Fiserv reported solid adjusted revenue growth in this segment, alongside a noticeable quarter-over-quarter improvement in the momentum of Financial Solutions.
InvestingPro Insights
Fiserv Inc. (NYSE:FI) has been a subject of positive attention following its impressive second-quarter results and enhanced financial outlook for 2024. Aligning with this optimistic view, InvestingPro data highlights the company's robust fundamentals. With a market capitalization of $94.3 billion and a P/E ratio standing at 27.25, Fiserv presents itself as a substantial player in the financial services industry. The company's adjusted P/E ratio for the last twelve months as of Q2 2024 is 28.46, while its PEG ratio suggests that it is trading at a low price relative to near-term earnings growth, with a value of 0.7.
Revenue growth remains solid, with a 7.2% increase over the last twelve months as of Q2 2024, and the gross profit margin impressively stands at 60.96%. These figures are indicative of Fiserv's ability to expand its operations profitably, which is also reflected in the company's operating income margin of 26.2%. Notably, Fiserv is trading near its 52-week high, at 99.65% of the peak, signifying investor confidence and a strong market position.
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