Fidelity's Improved Business Mix Is Reflected In Shares (Rating Downgrade)

2025-05-18 23:15:58 ET

Summary

• Fidelity has reshaped its portfolio, selling Worldpay and acquiring GPN's Issuer Solutions to improve business mix and earnings quality.
• The Worldpay sale locks in value but highlights past missteps; new acquisition adds scale but increases leverage and execution risk.
• Recent financial results are mixed, with slow growth, margin compression, and delayed contract signings tempering near-term optimism.
• After a 10% rally, upside is now limited; I downgrade FIS to 'hold' and would only buy on a pullback toward $75.

Shares of Fidelity National Information Services ( FIS ) have had a roller coaster ride over the past year, as mixed financials and significant M&A have broadly offset to leave shares trading flat to where they were a year ago. I last covered shares in February , upgrading Fidelity to a “buy.” This proved to be good timing, with the stock jumping over 10% while the market has been flat. While I previously raised the prospect of FIS selling its stake in Worldpay, the speed with which it happened came about sooner than anticipated. With so much news over the past quarter, now is a good time to revisit FIS....

Read the full article on Seeking Alpha

For further details see: