Analysts Highlight Global Payments' Widening Gap With Fiserv In Merchant Acquiring

Mizuho analyst Dan Dolev reiterated Neutral on Global Payments Inc GPN with a $132 price target reflecting weak and unreliable results.
The 3Q 2022 was weak and complicated. Most notably, underperformance in Merchant acquiring vs. Fiserv, Inc FISV is widening.
Issuer growth decelerates again. The "excluding this / including that" analysis is as confusing as ever.
Most notably, GPN changed the goalposts to maintain the 10-11% adj. revenue guidance.
BMO analyst James Fotheringham maintained Outperform and cut the price target from $232 to $224.
Following GPN's 3Q22 in-line result, he lowered estimates and target price.
Merchant Solutions suffered from limited travel exposure and slower growth in U.K. and Asia.
GPN expects full-year EPS below its prior guidance range but maintains its outlook for revenue growth.
GPN completed its Silver Lake deal, while its EVO Payments, Inc EVOP acquisition, and NetSpend divestiture are on track to close in 1Q23.
RBC analyst Daniel Perlin reiterated Outperform and the $156 price target.
As expected, GPN reported a noisy quarter, given the pre-funding of the EVO acquisition, the upcoming divestiture of Netspend's consumer business, and incremental FX headwinds.
Although aggregate results were broadly in line with Street expectations, the segment performance for Merchant was below his model, while Issuer came in with better margins.
He believes numbers will continue to have noise until both EVO's acquisition and Netspend's consumer business close, likely in Q123. He believes investors will begin to re-engage in the name.
Credit Suisse analyst Timothy Chiodo reiterated Neutral and cut the price target from $145 to $135.
He hailed the FY22 margin guidance hike, margin beat for the quarter, higher Merchant yield, AOF in the implementation pipeline, and substantial revenue improvement in Spain, Central Europe, and Southeast Asia.
Price Action: GPN shares traded higher by 0.19% at $114.48 on the last check Tuesday.

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