Bulletin
Investor Alert

The Ratings Game Archives | Email alerts

Nov. 19, 2020, 2:36 p.m. EST

Fiserv stock gains after analyst upgrade, boost to buyback program

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Fiserv Inc. (FISV)
  • X
    S&P 500 Index (SPX)
  • X
    Exxon Mobil Corp. (XOM)

or Cancel Already have a watchlist? Log In

By Emily Bary

Shares of Fiserv Inc. were up more than 4% in midday trading Thursday after the company boosted its share-buyback authorization and was the subject of an analyst upgrade.

The financial technology company announced Thursday morning that it was increasing its share-repurchase authorization by 60 million shares . This will be in addition to the shares remaining under its existing buyback-authorization, which stood at 7.5 million as of the end of September.

Don’t miss: Square stock could head to $300 with help from Cash App momentum, analyst says

Separately, MoffettNathanson analyst Lisa Ellis upgraded Fiserv’s stock /zigman2/quotes/204817680/composite FISV +0.20% to buy from neutral in a Thursday morning note titled “Fiserv: The Reports of My Death Are Greatly Exaggerated.” She wrote that Fiserv has been the worst-performing stock this year among the payments names she covers, underperforming the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.72% by 17% as of Wednesday’s close, despite what she said is a “relatively high pandemic resistance.”

Ellis has only lowered her fiscal 2022 earnings estimates for Fiserv by 4% from what they were prior to the pandemic, while she’s reduced estimates for nearly every other payments name by more. Still, she said the stock has fallen out of favor with investors who seem worried about how Fiserv’s merchant-acquiring business will fare now that the pandemic is moving more spending online, as well as the recent leadership transition at the company.

Fiserv’s merchant-acquiring business “is in a healthier competitive position than is often perceived,” Ellis argued, even with the transition of more payment volume to online channels. “We believe the small, high-growth e-commerce specialty players like Adyen, Stripe, and PayPal are primarily taking market share from traditional, in-country players (who still command ~40% market share globally),  not  from Fiserv (a common bearish view)

Ellis expects that Fiserv could use its December investor day to provide additional information on its competitive position in e-commerce, which could serve as a catalyst for the stock. Other potential catalysts in her view are the company’s next earnings report, which she predicts will contain comprehensive full-year guidance, and progress on the company’s leverage goals.

Fiserv is aiming for a 2.7x ratio of net debt to earnings before interest, taxes, depreciation, and amortization, something Ellis said could happen in the second half of 2021 and allow the company to make acquisitions in the merchant-acquiring landscape, particularly around high-growth geographic regions or the e-commerce space.

The company also announced Thursday that it would be working with Exxon Mobil Corp. /zigman2/quotes/204455864/composite XOM -4.81% on a contactless payment feature that makes use of Alphabet Inc.’s /zigman2/quotes/205453964/composite GOOG -0.23% /zigman2/quotes/202490156/composite GOOGL -0.19% upgraded Google Pay wallet.

Shares of Fiserv have lost 2.7% so far this year as the S&P 500 has risen 10.5%.

/zigman2/quotes/204817680/composite
US : U.S.: Nasdaq
$ 108.20
+0.22 +0.20%
Volume: 7.13M
Jan. 15, 2021 4:00p
P/E Ratio
82.36
Dividend Yield
N/A
Market Cap
$72.54 billion
Rev. per Employee
$231,523
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
3,768.25
-27.29 -0.72%
Volume: 2.74B
Jan. 15, 2021 5:18p
loading...
/zigman2/quotes/204455864/composite
US : U.S.: NYSE
$ 47.89
-2.42 -4.81%
Volume: 42.41M
Jan. 15, 2021 4:00p
P/E Ratio
61.56
Dividend Yield
7.27%
Market Cap
$202.49 billion
Rev. per Employee
$3.42M
loading...
/zigman2/quotes/205453964/composite
US : U.S.: Nasdaq
$ 1,736.19
-3.99 -0.23%
Volume: 1.34M
Jan. 15, 2021 4:00p
P/E Ratio
34.67
Dividend Yield
N/A
Market Cap
$1171.43 billion
Rev. per Employee
$1.36M
loading...
/zigman2/quotes/202490156/composite
US : U.S.: Nasdaq
$ 1,727.62
-3.30 -0.19%
Volume: 1.57M
Jan. 15, 2021 4:00p
P/E Ratio
34.50
Dividend Yield
N/A
Market Cap
$1171.43 billion
Rev. per Employee
$1.36M
loading...

Get news alerts on Fiserv Inc. — or create your own.
This Story has 0 Comments
Be the first to comment
More News In
Industries

Story Conversation

Commenting FAQs »
Link to MarketWatch's Slice.