Fiserv (FISV) shares are trading sharply lower on disappointing Q1 results, and a downgrade by Credit Suisse.
FIserve, a provider of technology services to the financial sector, posted Q1 revenue of $1.01 billion with profits of 95 cents, missing the Street consensus at $1.04 billion and 97 cents. Revenue was down 1% from a year ago.
For the full year, the company continues to see profits of $3.96 to $4.07 a share, consistent with the Street consensus at $4.02.
Credit Suisse analyst Bryan Keane this morning downgraded FISV to Neutral from Outperform, with a $55 price target, a hair over yesterday’s close at $54.69. He points out in a research note that the company suffered “soft output solutions revenue, continued weak check processing volumes and lower license and professional services sales.”
Keane asserts that “it will become increasingly challenging [for FISB] to deliver the same amount of operating leverage that we have become accustomed to over the past five years.” He adds that “if organic growth fails to materialize, we are not convinced that FISV can deliver a similar amount of margin expansion to deliver profits as it has done in [the] recent past.”
FISV today is down $3.55, or 6.5%, to $51.14.
No comments:
Post a Comment