On Wednesday, Seaport Global Securities shifted its stance on Global Payments (NYSE:GPN), downgrading the stock from Buy to Neutral. The firm cited the Investor Day presentation as a pivotal moment for the company, acknowledging a strategic shift intended to unify and streamline operations. This move is seen as necessary for Global Payments to remain competitive in the market.
The analyst from Seaport Global Securities noted that while the medium-term (MT) guidance provided some clarity for investors and the $7.5 billion share buyback announcement was a positive, the actual financial outlook presented by Global Payments fell short of expectations. The company's growth projections, especially in the Merchant segment, were less robust than anticipated, with only a 5% increase expected in 2025.
The assessment further detailed that the growth outlook for the Issuer segment next year appears subdued. Looking beyond 2025, the firm expressed concerns about the visibility into 2026 and 2027, describing the forecast for mid-single-digit to high-single-digit (MSD/HSD) top-line growth and low teens earnings per share (EPS) growth as suboptimal.
In light of these revisions, Seaport Global Securities believes that shares of Global Payments now appear to be trading close to their fair value. The previous price target set by the firm was $134, but with the updated perspective and the company's current trajectory, the analyst concluded that a downgrade to Neutral was warranted.
In other recent news, Global Payments Inc. has been the focus of several analyst adjustments. Monness Crespi Hardt cut its price target for the company to $155, while still maintaining a Buy rating. This follows the company's Investor Conference where it outlined strategic goals and growth trajectory through 2027, with revenue and earnings per share growth expected to accelerate in the coming years. B.Riley also reduced its price target for Global Payments to $194, maintaining a Buy rating, citing the company's favorable three-year outlook.
BMO Capital Markets revised its price target for Global Payments from $126 to $122, maintaining a Market Perform rating due to the company's 2025 guidance falling short of market expectations. However, the firm viewed positively the company's plans for increased stock buybacks and potential upside from asset disposals. William Blair downgraded Global Payments from Outperform to Market Perform due to concerns over long-term organic revenue growth.
TD Cowen, despite reducing the company's stock target to $122, maintained a Buy rating, expressing optimism about the company's long-term potential. Global Payments has outlined strategies to achieve around $500 million in operational savings and committed to returning $7.5 billion to shareholders through stock buybacks and dividends.
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