Fidelity National Information Services (FIS) won't be lacking for catalysts over at least the next couple of years. Not only will this large merchant acquirer benefit from post-pandemic normalization of spending patterns (including more travel), but the banking IT side is poised to benefit from both increased bank IT spending and an increasingly willingness on the part of larger banks to outsource at least some of their IT needs.
Valuation is interesting. It looks as though there are lingering concerns that FIS will see a slowdown in Banking Solutions outsourcing and/or that smaller disruptors in fintech will kill the golden goose that is merchant acquiring and payment tech. I don't think either are likely, but it does make me a little nervous that most sell-siders seem to base their valuation arguments on the P/E of the S&P 500 (giving FIS a modest premium). I do see some upside here on my preferred valuation methodologies, though, and I do think there's room for FIS to outperform expectations.
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