EVOP - Wells Fargo picks transaction processing/fintech names poised to outperform in '21

Transaction processing and fintech stocks are finishing up a year where the sector's average return outpaced the S&P 500 (so far), but that was driven by only a handful of companies.Their median return lags the S&P 500 by 6% for the YTD.Wells Fargo analyst Timothy Willi sees the sector's EPS growth bouncing back materially during 2021 as an improving economy combines with cost savings that were implemented in 2020.He advises being a "bit more selective" next year and favors fintech slightly more than transaction processing.Key themes for the year: Pricing for merchant acquirers and their yields could exceed expectations;Proprietary network effects should more clearly emerge and create new revenue opportunities for select names such as Square ([[SQ]] +2.8%), PayPal ([[PYPL]] +1.9%), Shopify ([[SHOP]] +6.9%), and Bill.com ([[BILL]] +2.2%);Omni-channel commerce redraws the competitive picture, especially as "e-commerce native players begin to reach in-store with their processing capabilities and consumer wallets";Integrated payments

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Wells Fargo picks transaction processing/fintech names poised to outperform in '21