Fidelity National Information Services (FIS:NYE) Analysts lower targets on earning loss

Fidelity National Information Services Inc Stock Forecast:

According to 26 analysts, the average target price for Fidelity National Information Services Inc over the next 12 months is USD 58.04, and the average analyst rating is “Hold.” Stock Target Advisor‘s analysis is “Bearish” based on 4 positive and 10 negative signals. The stock price for Fidelity National Information Services Inc was USD 66.00 at the last closing and has decreased by -9.70% over the past week, -5.38% over the past month, and -41.03% over the last year.

Analysts Coverage Change:

  • Morgan Stanley & Co. upgraded Fidelity National Information Services Inc to an “Overweight” rating and raised the target price to USD 79 from USD 73
  • Credit Suisse Group Downgraded the rating to “Neutral”.
  • UBS lowered the target price to USD 78 from USD 86.
  • Wells Fargo & Company maintained the “Underweight” rating and lowered the target price to USD 65 from USD 67.
  • Barclays maintained the “Equal-Weight” rating and lowered the target price to USD 68 from USD 73.
  • Robert W. Baird & Co. maintained the “Outperform” rating and lowered the target price to USD 80 from USD 84.

Fidelity National Services Inc. News:

Fidelity National Information Services (FIS:NYE) was the worst-performing stock in the S&P 500 as it announced the spin-off of its merchant solutions unit, Worldpay, and warned of weaker profits in 2023. The decision to make Worldpay a standalone company was made by the board and management, with the aim of enhancing shareholder value. This comes after FIS purchased Worldpay for $43 billion in 2019. The transaction is expected to be completed within the next year.

FIS cited a decline in revenue at its Merchant Solutions division, which fell 1% to $1.18 billion in the fourth quarter, as the reason for the weak performance. The CEO attributed this to the increasing recessionary impacts in the U.K. and a shift in consumer spending patterns in the U.S. from goods to services. Overall, the company reported a 1% increase in revenue to $3.71 billion and earnings per share (EPS) of $1.17, which were slightly higher than expected. However, FIS projected a weaker full-year EPS of $5.70 to $6, which was below analysts’ estimates.

The announcement led to a 12.5% drop in FIS shares, which have lost 41% in the past year.

Positive Fundamentals:

Fidelity National Information Services (FIS:NYE) is a large company in its sector with a high market capitalization, which indicates that it is among the top performers and is likely to be more stable. In addition, the stock is currently trading at a lower price compared to its peers based on a price to book value ratio, which suggests that it may be undervalued. However, it is important to check the company’s financial performance to ensure that there are no specific reasons for the lower price.

Moreover, FIS has had positive cash flow in the most recent four quarters, indicating that it is generating enough cash to cover its operating expenses. Furthermore, the company has also had positive free cash flow in the most recent four quarters, which indicates that it has excess cash after capital expenditures, which could be used to pay dividends, buy back shares or invest in growth opportunities.

Overall, FIS’s high market capitalization, underpriced valuation, and positive cash flow and free cash flow make it an attractive investment option, but it is important to conduct further research before making an investment decision.

Negative Fundamentals:

Fidelity National Information Services (FIS:NYE) is delivering poor risk-adjusted returns, below-median total returns, and below-median dividend returns compared to its peers. The company is also overpriced compared to its earnings, trading high on a price to earnings and price to free cash flow basis. Its management has delivered below-median return on equity, invested capital, and assets in the most recent four quarters. Additionally, the company has shown below-median earnings and dividend growth in the previous five years compared to its sector. Investors should exercise caution when considering buying this stock.

FA Score (Fundamental Analysts):

The fundamental analysis of Fidelity National Information Services is “Bearish” with a FA score of 2.9 out of 10, where 0 is very bearish and 10 is very bullish.

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