GPN: Fine-tuning the model

研报英文原文证据摘录

GPN: Fine-tuning the model

Global Payments Inc.

Target/Upside/Downside Scenarios Investment summary

GPN is undergoing a long-term transformation to streamlineGlobal Payments Inc.

its business and create a more simplistic and cleaner operating

160 125 Weeks 23JAN24 - 12JUN26 structure. We remain Sector Perform until we see proof-points

140 of the strategy working.

100 Risks to rating and price target

80 TARGETTARGET 82.0082.00 A macroeconomic slowdown or possible recession, increased

CURRENTCURRENT 67.7167.71

60 competition, and/or the company's inability to achieve its

40 stated cost synergies related to its Worldpay acquisition could

20 cause the stock to perform below our expectations and pose

60m risks to the achievement of our price target objective and to

40m

20m our rating.

2024 2025 2026

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J

GPN US Rel. S&P 500 COMPOSITE MA 40 weeks

Source: Bloomberg and RBC Capital Markets estimates for Target

Valuation

Our price target of $82 is ~6x our CY26 adj. EPS estimate

of $13.75; the target multiple is in line with peers & below

historical averages, which we believe is currently warranted

given the multiple moving parts in the company’s recent

acquisition of Worldpay (WP) and asset sale of Issuer. Our

price target supports our Sector Perform rating.

Upside scenario

Our upside scenario valuation is $85, or a P/E of ~6x our

upside CY26 adj. EPS estimate of $14.36 (5% premium to base

estimate) and would be reflective of better-than-expected

results. This upside potential assumes acceleration in organic

growth & margins for core GPN and WP.

Downside scenario

Our downside scenario valuation is $55, or a P/E of ~5x our

downside CY26 adj. EPS estimate of $12.37 (10% discount to