Fiserv Inc (NASDAQ: FISV) reporting 6% internal growth in the third quarter, backed by 10% growth in merchant solutions.
The company remains attractive on its prospects of to bring together modern commerce solutions, outperform synergies targets and effectively deploy capital, according to KeyBanc Capital Markets.
KeyBanc's Josh Beck maintained an Overweight rating on Fiserv, keeping the price target at $120.
Fiserv reported its third-quarter adjusted earnings at $1.02 per share, beating the Street expectation of 99 per share. The company reported adjusted revenue of $3.6 billion, including First Data, Beck said in the note.
Fiserv's internal revenue growth accelerated sequentially by 100 basis points to 6%. This was driven by card services, electronic payments, and outputs solutions businesses, the analyst mentioned.
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He added that merchant solutions grew by a strong 10%, with the growth being driven by the North America segment.
Management commentary indicated both revenue and cost synergies were tracking well. "The $200M synergy opportunity associated with the distribution of merchant acquiring services is now expected to be surpassed based on 20 wins to date," Beck wrote.
He added that Fiserv had signed 14 new core account processing clients in the third quarter.
The analyst raised the earnings estimates for the fourth quarter, fiscal 2019 and fiscal 2020 from 95 cents per share to $1.13 per share, from $3.46 per share to $4.00 per share and from $3.85 per share to $4.95 per share, respectively.
Shares of Fiserv were up 0.35% to $110.03 at the time of publishing on Friday.
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