RBC Capital Markets has updated its stance on Fiserv (NYSE:FI) (NYSE: FISV), a leading global provider of financial services technology solutions.
The firm increased its price target on the stock to $224.00, up from the previous $183.00, while reiterating an Outperform rating.
The adjustment reflects RBC Capital's confidence in Fiserv's sustained growth despite a backdrop of reduced consumer spending.
The analyst noted that Fiserv has effectively managed to enhance its value-added services (VAS) penetration, which saw a quarterly increase of one percentage point.
Additionally, the expansion of its specialized software offerings and a strong distribution network, particularly with plans to take its Clover platform to international markets, contribute to the firm's optimistic outlook.
Fiserv's Financial Solutions segment has also been highlighted for its stability, further reinforcing RBC Capital's belief in the company's prospects. The analyst's commentary underscored the expectation that Fiserv will maintain its mid-term organic growth trajectory of 9% to 12%.
In other recent news, Fiserv has displayed a robust financial performance with third-quarter results revealing a 17% year-over-year increase in adjusted earnings per share (EPS) to $2.30, and a 7% growth in adjusted revenue to $4.9 billion. Analyst firms Wells Fargo, Baird, Jefferies, and CFRA have all adjusted their outlooks on Fiserv.
Wells Fargo maintained an Overweight rating and raised its price target to $220, while Baird also increased its price target to $220 and maintained an Outperform rating. Jefferies raised its price target to $200, maintaining a hold rating, and CFRA upgraded Fiserv's status from Buy to Strong Buy, raising the price target to $235.
These adjustments follow Fiserv's recent financial performance and the company's raised guidance for the fiscal year 2024, which includes organic growth of 16-17%, adjusted revenue growth of 7-8%, and adjusted EPS of $8.73-8.80. Fiserv's Merchant Solutions segment displayed a remarkable 24% organic revenue growth, leading to these raised expectations.
InvestingPro Insights
Fiserv's strong market position and growth trajectory, as highlighted by RBC Capital Markets, are further supported by recent data from InvestingPro. The company's market capitalization stands at an impressive $114.96 billion, reflecting its significant presence in the financial services technology sector.
InvestingPro data reveals that Fiserv has demonstrated robust financial performance, with a revenue of $20.12 billion over the last twelve months as of Q3 2023, and a healthy revenue growth of 6.99% during the same period. This aligns with RBC Capital's expectation of sustained mid-term organic growth.
Two key InvestingPro Tips are particularly relevant to the article's context:
1. Fiserv is trading near its 52-week high, which corroborates the positive outlook expressed by RBC Capital.
2. The company has shown a strong return over the last three months, with InvestingPro data indicating a 27% price total return over this period.
These insights reinforce the analyst's confidence in Fiserv's growth potential and market position. For investors seeking a deeper understanding of Fiserv's financial health and market performance, InvestingPro offers 10 additional tips, providing a comprehensive view of the company's prospects.
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