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With a market cap of $47.4 billion, Fidelity National Information Services, Inc. (FIS) provides technology solutions for banking, payments, and capital markets worldwide. Based in Jacksonville, Florida, it serves financial institutions, businesses, and developers with various financial services technologies.
Shares of the banking and payment technologies company have significantly outperformed the broader market over the past 52 weeks. FIS has surged 69.3% over this time, while the broader S&P 500 Index ($SPX) has rallied 35.9%. In 2024, shares of FIS are up 47.7%, compared to SPX’s 25.8% gain on a YTD basis.
Focusing more closely, Fidelity National Information has also outpaced the Financial Select Sector SPDR Fund's (XLF) 47.1% return over the past 52 weeks and a 32.7% YTD gain.
FIS shares recovered marginally on Nov. 4 after reporting strong Q3 results, with adjusted EPS up 48.9% year-over-year to $1.40, beating estimates. Revenue rose 3.2% to $2.6 billion, supported by growth in Banking Solutions and Capital Market Solutions through strong recurring revenue and new sales. The company also controlled expenses effectively, with SG&A expenses coming in below projections and a significant 60.5% decline in net interest expenses. Additionally, FIS raised its 2024 guidance, projecting revenue between $10.1 billion - $10.2 billion and adjusted EPS of $5.15 - $5.20, boosting investor confidence.
For the current fiscal year, ending in December, analysts expect FIS’ EPS to grow 53.7% year-over-year to $5.18. The company's earnings surprise history is mixed. It topped the consensus estimates in three of the last four quarters while missing on another occasion.
Among the 30 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on 14 “Strong Buys,” two “Moderate Buys,” and 14 “Holds.”
On Nov. 5, Morgan Stanley raised its price target on FIS to $87, maintaining an “Equal-Weight” rating. The firm notes strong trends in Banking and Capital Markets, with earnings boosted by Worldpay, though rising operating expenses may pose challenges next year.
As of writing, FIS is trading below the mean price target of $94.08. The Street-high price target of $115, implies a potential upside of 29.6% from the current price levels.
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 is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
