Baird reaffirms outperform rating on Global Payments stock, citing favorable risk/reward outlook By Investing.com
On Tuesday, Baird reiterated his Outperform rating at Global Payments Inc. (NYSE:) with a firm price target of $150.00. Company analysts expect the company's third-quarter earnings per share (EPS) to be in line with expectations, indicating that the Retailer segment may decline slightly. However, the impact of foreign exchange rates can provide some benefits, slightly different from the initial expectations.
An analyst from Baird expressed a belief in a positive risk/reward balance for Global Payments, citing the stock's valuation at about 7.5 times its estimated 2025 EPS. This estimate comes with expectations of 10-15% growth in EPS. While acknowledging investor concerns regarding the Seller's segment's market share, margins, earnings quality, and strength, Baird argues that the potential for improved free cash flow and strength, coupled with better earnings quality, outweighs the risks.
Global Payments' revenue growth was described as respectable, and Baird highlighted significant opportunities to buy the stock once the company finds a favorable position. The company's outlook reflects confidence in the company's financial strategy and future performance, especially considering the current valuation.
The analysis did not focus only on the positive aspects. It acknowledged reservations some investors may have about the Retailer segment, including stock performance, margin pressures, the nature of dividends, and the company's debt levels. However, the overall sentiment from Baird hinges on a more optimistic view of Global Payments' financial health and market conditions.
In summary, Baird's comments support a stable outlook for Global Payments, maintaining a price target of $150.00. The firm's positioning is based on a careful observation of the company's profitability, market valuation, and strategic financial management, which can lead to a position that benefits the company in the near future.
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