Fidelity National Information Services (FIS) Outshines Market with Strong Q3 Performance
Strong 52-Week Performance Sets FIS Apart
With a market cap of $47.4 billion, Fidelity National Information Services, Inc. (FIS) offers technology solutions for banking, payments, and capital markets globally. Headquartered in Jacksonville, Florida, it caters to financial institutions, businesses, and developers with a wide array of financial services technologies.
Stock Rally Attracts Attention
FIS shares have achieved remarkable success, increasing by 69.3% over the past year. In contrast, the broader S&P 500 Index ($SPX) has risen 35.9%. For the year to date, FIS stock has climbed 47.7%, while the SPX gained 25.8%.
Growth Outpacing Sector Benchmarks
Moreover, FIS has outdone the Financial Select Sector SPDR Fund’s (XLF) 47.1% return over the last 52 weeks, alongside a 32.7% gain year to date.
Strong Q3 Financial Results Boosts Investor Faith
On November 4, FIS reported impressive Q3 results with adjusted EPS rising 48.9% year-over-year to $1.40, exceeding expectations. Revenue increased 3.2% to $2.6 billion, bolstered by strong performance in Banking Solutions and Capital Market Solutions, driven by recurrent revenue and new sales. The company effectively managed expenses, with SG&A costs below forecasts and net interest expenses dropping by 60.5%. FIS also raised its guidance for 2024, estimating revenue between $10.1 billion and $10.2 billion and projecting adjusted EPS of $5.15 to $5.20, which positively influenced investor perceptions.
Future Earnings Expectations
For the current fiscal year ending in December, analysts predict FIS’ EPS to grow 53.7% year-over-year to $5.18. The company’s history of meeting earnings estimates is varied; it surpassed expectations in three of the last four quarters but fell short in one.
Analyst Consensus on FIS Stock
Among the 30 analysts following FIS, the consensus rating is a “Moderate Buy,” supported by 14 “Strong Buys,” two “Moderate Buys,” and 14 “Holds.”
Morgan Stanley Adjusts Price Target
On November 5, Morgan Stanley raised its price target on FIS to $87 while keeping an “Equal-Weight” rating. The firm acknowledges favorable trends in Banking and Capital Markets, credited partly to Worldpay, although it cautions that rising operating expenses could present challenges next year.
Current Trading and Market Potential
Currently, FIS shares are trading below the average price target of $94.08. The highest price target of $115 suggests a possible upside of 29.6% from present levels.
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On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
