Wells Fargo Starts Fidelity National Information Services (FIS) at Market Perform; Solid Fundamentals with Some Minor Headwinds

Wells Fargo initiates coverage on Fidelity National Information Services (NYSE: FIS) with a Market Perform. PT range $35-$37.

Analyst, Timothy Willi, said, "The market position of FIS and its product breadth provide strong visibility into a base rate of revenue and FCF generation. Further, FIS recently shifted its capital allocation strategy, highlighted by a 300% increase in its dividend to $0.80 annually (a 2.5% yield), and we believe FIS is now focused on unlocking the value of its existing franchise and asset base, which is a strategy we view favorably. However, with some minor macro headwinds (Europe/U.S. economies), EPS growth is not likely to accelerate enough versus current estimates to be a catalyst for shares. Also, higher debt levels (2.8x EBITDA) put a cap on the valuation until investors have more confidence in improved debt levels and financial flexibility, in our view. Revenue and EPS estimates are $6,014 million and $2.52 for 2012, and $6,293 million and $2.83 for 2013."

For an analyst ratings summary and ratings history on Fidelity National Information Services click here. For more ratings news on Fidelity National Information Services click here.

Shares of Fidelity National Information Services closed at $32.22 yesterday.

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