Fiserv Inc (FI) Stock Forecast & Price Target

Fiserv demonstrates a robust positioning in the core processing and payment sectors with an organic revenue growth of approximately 16% for FY24, although it is important to note that excluding Argentina, which is experiencing extreme inflation, the organic growth stabilizes at around 6%. The company’s legacy operations are showing normalized organic revenue growth potential that is anticipated to be in the mid-single digits, suggesting a solid foundation for sustained performance. Additionally, the growth from Fiserv's Clover platform indicates its capacity to drive further revenue improvements, with analysis suggesting that achieving a normalized organic growth rate of 7% or higher could significantly bolster confidence in the company's financial trajectory.

Fiserv's adjusted operating margins are projected to decline by approximately 200 basis points, contrasting with a prior expectation of a 100 basis point increase, while free cash flow is also anticipated to decrease to around $4.25 billion from an earlier estimate of $5.5 billion. The company's operating margins fell to 42.5%, down from 47.4% in the previous year, as the new management's review led to a significant reduction in revenue and earnings forecasts, with adjusted EPS expectations for 2027 decreasing by 30%. The company's Financial Solutions segment reported a 3% decline in revenue, raising concerns about growth potential amidst a slowdown in Core Banking and Digital Payments revenues, which could hinder future performance assumptions reliant on IT spending.