KeyBanc Adjusts Global Payments (NYSE:) Outlook, Analysts Remain Optimistic
KeyBanc recently revised its financial outlook on Global Payments Inc., reducing the price target to $135.00 from $145.00. Despite this adjustment, the analyst maintained an Overweight rating on the stock following the company's investor day on September 24, 2024.
During the investor day, Global Payments unveiled a significant operational transformation initiative and provided insights into the Merchant Solutions subsegment's financial profiles. The company also shared preliminary guidance for fiscal year 2025, which indicated revenue and adjusted EPS growth below Wall Street's expectations due to resource reallocation for the ongoing transformation.
Looking ahead, KeyBanc expressed optimism for fiscal years 2026 and 2027, with the medium-term outlook projecting accelerating revenue growth and margin expansion. The firm's positive stance is driven by Global Payments' exposure to spending trends and tech-enabled mix in the Merchant segment.
Despite the conservative fiscal year 2025 outlook, KeyBanc believes in the company's ability to execute transformation initiatives, particularly in go-to-market strategies. The valuation reflects mid-single-digit-plus revenue growth and low-double-digit adjusted EPS growth.
In conclusion, investors should monitor Global Payments' progress in executing its transformation plan and evaluate the potential for revenue and earnings growth in the coming years. The lowered price target is based on the firm's adjusted fiscal year 2025 estimates and the company's valuation multiples.