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Analysts told investors that their firm decided on the rating increase based on the company’s improving growth outlook.
Approaching the company’s 4Q23 earnings report on February 14, Evercore ISI sees 2024 as a year of steadily improving financial performance. This is due to “cleaner comparisons following the anniversaries of the NetSpend and Gaming business divestitures, the ramp of EVOP cost synergies, and superior positioning in high growth, tech-enabled solutions.”
“We envision meaningful upward revisions to CY24 & CY25 adjusted EPS consensus estimates plus forward multiple expansion stemming from declining capital intensity and improved FCF conversion,” analysts wrote.
They added that key drivers of likely outperformance include the potential for high-single-digit revenue growth driven by increased software penetration, significant, sustainable margin expansion, improved FCF outlook driving share repurchases well above consensus expectations, and the “near trough valuation of 11x FY2 P/E.”
