Tuesday, Mizuho Securities expressed confidence in Fiserv (NYSE:FI) stock, a financial services technology company, by raising its price target to $183 from the previous $168 while maintaining an Outperform rating.
The company's second-quarter results last week highlighted the strength of its Merchant Solutions business, despite broader economic concerns and less favorable conditions, such as reduced benefits from inflation in Argentina and a slowdown indicated by Visa (NYSE:V)'s July transaction volumes.
Fiserv's management has upheld its organic growth outlook for 2024, which forecasts a 25-28% increase in Merchant Solutions. Some market participants have expressed concerns that a slowing economy could jeopardize this guidance.
However, Mizuho's detailed bottom-up analysis suggests that Fiserv has various strategies and safeguards in place to mitigate potential negative impacts from an economic downturn.
The analysis included stress testing the company's financial model, leading to the conclusion that even in less favorable conditions, the higher end of the projected growth range is achievable. Based on these findings, Mizuho has also revised its earnings per share estimates for Fiserv upward.
This update comes at a time when many companies in the financial technology sector are facing uncertainty due to global economic fluctuations. Fiserv's ability to maintain its growth guidance in such an environment is a testament to the company's robust business model and strategic planning. The new price target of $183 reflects Mizuho's optimism about Fiserv's performance and its potential to weather macroeconomic challenges.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.