Stifel Raises Price Target on Global Payments (GPN) to $76 Following 1Q Report
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Stifel reiterated a Hold rating on Global Payments (NYSE: GPN), and raised the price target to $76.00 (from $75.00) following the company's 1Q earnings report. GPN reported EPS of $0.86, ahead of the consensus estimate of $0.84. With the addition of the bellwether Heartland Payments (HPY) acquisition, GPN grew net revenues 52.2% to $817.3M, which came in ahead of consensus at 814.2M. This outperformance came despite FX headwinds.
Analyst Christopher Brendler commented, "In our view, GPN reported an impressive beat-and-raise quarter with solid results across all three key geographies. While we were somewhat disappointed on the disclosure around the impact of the HPY acquisition, you can’t argue with the results as GPN delivered better-than-expected North American revenue growth. Combined with improving, low-double digit growth in both Europe and Asia as well as modest margin expansion, GPN is becoming part of the conversation on best-in-class merchant acquirers (VNTV, WPG-LN). With the HPY integration just getting started, we expect the strong results to continue and are raising estimates. However, while there is clearly a lot to like and we aren’t concerned about any EMV-related slowdown, we stop short of a Buy rating as we do not see enough upside potential to more than offset the risk that comes with a premium valuation and little margin for error. As such, we remain Hold rated."
Shares of Global Payments closed at $78.98 yesterday.
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