Fiserv Gains 2.2% on Solid Q2 Results

Shares of Fiserv (FISV) rallied 2.2% in the early trading session on Tuesday as the company posted impressive Q2 results. The fintech and payments company witnessed robust performance across all its segments and raised earnings guidance for 2021.

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The company reported adjusted earnings of $1.37 per share, up 47% from the last year’s quarter, beating the Street’s expectations of $1.28 per share.

Q2 adjusted revenues were up 20% year-over-year at $3.86 billion and surpassed expectations of $3.73 billion. Revenues in the Acceptance segment climbed 42.7%.

In the first six months of 2021, free cash flow increased 4% to $1.72 billion on a year-over-year basis. Also, adjusted operating margin expanded 4.4% to 32.7% in the first two quarters of 2021. (See Fiserv stock chart on TipRanks)

“We had a very strong quarter driven by both macroeconomic tailwinds and the execution of our business strategy focused on winning business with new and existing clients,” said, Frank Bisignano, the President and CEO of Fiserv. “Our assets and continued innovation position us well to grow faster with financial institutions, fintechs and businesses of all sizes,” he added.

Backed by strong performance in the first half of 2021, Fiserv has raised its full-year guidance. It expects internal revenue growth of 10% to 12% and adjusted earnings per share in the range of $5.50 to $5.60 (up 24% to 27% year-over-year) for 2021.

On July 21, Robert W. Baird analyst David Koning assigned a Buy rating to the stock with a price target of $148 (32.9% upside potential).

Koning said, “We believe that cross-selling initiatives and newer products could enhance underlying revenue growth by 1-2% per year over the next several years, while cost cuts (combining offices, off-shoring, etc.) likely continue to add to profits.”

The stock has a Strong Buy consensus based on 8 Buys and 2 Holds. The average Fiserv analyst price target of $144 implies 23.8% upside potential from current levels.

Fiserv scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.