Mizuho Securities analyst Dan Dolev has maintained their neutral stance on GPN stock, giving a Hold rating on February 15.
Dan Dolev’s Hold rating on Global Payments stems from a cautious perspective on the company’s recent mergers and acquisitions (M&A) activity and its impact on future earnings. Despite Global Payments spending $126 million on M&A activities in the fourth quarter, the management’s revelation that this would only add roughly 10 basis points to the 2024 revenue guidance was unexpected. Dolev infers that the acquired assets may not significantly enhance Global Payments’ profitability, particularly because some of the acquired operations were already within the company’s payment processing domain, which implies limited incremental earnings before interest and taxes (EBIT) from these deals.
Further, Dolev’s analysis suggests that, excluding the effects of M&A activities, the 2024 pro forma margin growth guidance would be lower than anticipated. By comparing similar transactions in the industry, such as First Data’s acquisition of CardConnect, which had an existing partnership with the acquirer, he estimates that Global Payments’ recent acquisition might contribute only $20-25 million to EBIT. This, coupled with a downward adjustment of Global Payments’ margin and earnings per share estimates for 2024, supports the decision to maintain a Hold rating with an unchanged price target.
In another report released on February 15, J.P. Morgan also maintained a Hold rating on the stock with a $159.00 price target.
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Based on the recent corporate insider activity of 51 insiders, corporate insider sentiment is neutral on the stock.
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Global Payments (GPN) Company Description:
Georgia-based Global Payments, Inc. provides payment technology and software solutions for card, electronic, check, and digital-based payments in North America, Europe, the Asia-Pacific, and Latin America. The company operates through the following segments: Merchant Solutions, Issuer Solutions and Business & Consumer Solutions.
Read More on GPN:
- Global Payments price target raised to $163 from $145 at Argus
- Global Payments price target raised to $172 from $154 at RBC Capital
- Global Payments price target raised to $204 from $186 at B. Riley
- Global Payments price target lowered to $180 from $185 at Evercore ISI
- Global Payments price target raised to $160 from $150 at Susquehanna
