FIS - Fidelity National Information risk/reward remains attractive William Blair says

2023-07-07 12:17:51 ET

• Fidelity National Information Services' ( NYSE: FIS ) stock has gained ~12% since reports of a stake sale in its Worldpay business began doing the rounds, but William Blair believes the risk/reward remains attractive for longer-term investors.
• GTCR is buying a majority stake in Worldpay at a valuation of $18.5B. Fidelity ( FIS ) will receive upfront, net proceeds of ~$11.7B while retaining a non-controlling 45% stake in a new standalone joint venture.
• "The Worldpay business is being acquired at ~9.8x 2023 EBITDA, which is a modest discount to its peers, and compares to FIS at ~8x," said analyst Cristopher Kennedy.
• He said Worldpay has leading market share worldwide, with nearly $2T of volume on its platform. "We believe this scale provides advantages over its global peers and local regional based acquirers."
• Kennedy said both FIS and Worldpay are well positioned to benefit from long-term secular tailwinds. "After years of choppy financial results, we believe FIS' new management is focused on improving the likelihood of a beat-and-raise cadence."
• While sell-side analysts are largely bullish on FIS , SA Quant rates the stock Hold .

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