On Thursday, KeyBanc maintained its positive stance on Global Payments Inc. (NYSE:GPN) shares, reiterating an Overweight rating and a $145.00 price target for the stock. The financial technology services provider is scheduled to conduct its 2024 Investor Day on September 24th, both in New York City and via a virtual platform. The event is anticipated to focus on a variety of updates and strategies across the company's business segments.
The analyst expects that the Investor Day will provide insights into the Merchant segment, discussing the growth strategy through Independent Software Vendor (ISV) channel partnerships, the traction of the ProFac model, the comparison of tech-enabled versus traditional growth, and plans for international expansion. Updates on the Issuer segment are also predicted, with a spotlight on the Business-to-Business (B2B) strategy and a renewed look at the issuer processing growth opportunity.
In addition to segment-specific updates, Global Payments is also expected to outline its organizational restructuring initiatives. This includes presenting a refreshed cycle guidance, which the analyst suggests will offer a mid-term model framework for the company.
KeyBanc's continued endorsement of Global Payments is driven by what they view as a favorable exposure to spending and a tech-enabled mix in the Merchant segment. The firm also considers the stock's relative valuation attractive, noting that it reflects expectations of mid-single-digit (MSD) or higher revenue growth and low double-digit (LDD) adjusted earnings per share (EPS) growth.
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.
Baird maintained an Outperform rating on Global Payments, citing cleaner financial reporting as key to the company's future growth. Citi also maintained its Buy rating, suggesting the upcoming analyst day could provide clarity on the company's growth potential.
Similarly, 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. These are recent developments that investors should note.
InvestingPro Insights
As Global Payments Inc. (NYSE:GPN) gears up for its 2024 Investor Day, a glimpse into real-time data from InvestingPro provides a clearer picture of the company's financial health and market perception. With a market capitalization of $28.31 billion and a P/E ratio of 20.6, the company is trading at a valuation that appears to be in line with its near-term earnings growth potential. Notably, the adjusted P/E ratio for the last twelve months as of Q2 2024 stands at a more attractive 16.86, with a PEG ratio of just 0.25, indicating a potentially undervalued stock in terms of its growth rate.
The company has demonstrated revenue growth of 6.63% over the last twelve months leading up to Q2 2024, with a robust gross profit margin of 62.84%. This financial stability is further underscored by a consistent dividend payout, having maintained dividend payments for 24 consecutive years, providing a current yield of 0.9%. InvestingPro Tips highlight that analysts expect net income growth this year, and despite 17 analysts revising their earnings downwards for the upcoming period, the company is still projected to be profitable, having been profitable over the last twelve months.
Investors looking for medium-term performance indicators will find the company's strong return over the last three months of 20.94% particularly encouraging. For those seeking more comprehensive analysis, InvestingPro offers additional insights, including more InvestingPro Tips, which can be accessed for Global Payments at https://www.investing.com/pro/GPN.
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