2023-08-10 10:17:26 ET
Jefferies on Thursday upgraded Global Payments ( NYSE: GPN ) to Buy from Hold, as the company breezed past concerns over organic growth in the legacy Merchant segment.
Shares +4.2% in morning trade.
In June, analyst Trevor Williams raised concerns over GPN's legacy Merchant growth based on trends through May. "Despite our concerns into the print, merchant growth positively de-coupled from Visa/Mastercard in Q2, and we now believe above-market growth will persist for the balance of 2023, which should improve the narrative around structural positioning and drive continued re-rating."
Williams noted that Global Payments' ( GPN ) Merchant organic revenue grew 9% Y/Y in Q2 on volume growth of 9%, outperforming V/MA's combined U.S. volume growth by 3 percentage points.
"We believe GPN has a renewed scarcity value with estimates in a safer place and a depressed multiple that makes for an asymmetric risk/reward," he said.
Price target was raised to $145 from $125, implying 16.9% potential upside to GPN's last close. Stock has risen 29.2% YTD.
While sell-side analysts are largely bullish on GPN, SA Quant rates it Hold .
Last week, Global Payments ( GPN ) stock climbed 9.5% after its Q2 earnings beat estimates on lower expenses.
For further details see:
Global Payments stock rises 4% as Jefferies upgrades to Buy after results