7 Financial-Technology Stocks to Buy, According to Goldman Sachs


Andrew Harrer/Bloomberg

Goldman Sachs
Group analysts examined a coronavirus pandemic’s near-term impacts and slow effects on a remuneration industry, such as larger adoption of contactless payments and online commerce.

On Tuesday, Goldman began coverage of 15 bonds in a financial record sector, giving Buy ratings to 7 companies, and putting Mastercard and Fiserv on a Conviction List, a many bullish picks.

Among a credit label giants,
Mastercard
(ticker: MA) and
Visa
(V) are both instituted during Buy, with expansion intensity in a mostly untapped B2B remuneration market. Mastercard could outperform rivals, with a comparatively aloft participation in under-penetrated markets like Europe, according to an analyst.

Mastercard’s expansion in a core consumer label shred is “likely to overtake peers given bearing to Europe and expansion markets where MA is gaining share,” researcher Matthew O’Neill pronounced in a investigate note, adding that a tentative acquisition of Danish remuneration association Nets could accelerate a position in a region.

Goldman’s cost aim for Mastercard is $364 a share. The batch rose 2.1% to $296.54 on Tuesday. The cost aim for Visa is $223. Its shares were adult 1.8% to $192.33.

Also on a Conviction List is
Fiserv
(FISV), that is Goldman’s best collect among firms that routine digital remuneration transactions. Stable expansion and cost potency are a pivotal in a valuation.

“We trust FISV has one of a many defensive business models in a coverage given a infancy of income is subsequent from services that are vicious to support bank operations and reduction supportive to a macro environment,” O’Neill said. The researcher also remarkable cost synergy after a formation of First Data, a cloud program association Fiserv purchased for $22 billion final year, as a certain pointer for accelerated growth.

In May, Barron’s spoke with Fiserv’s new arch executive officer Frank Bisignano over a changeable trends to digital payments amid a Covid-19 pandemic.

Goldman’s aim cost for Fiserv is $125. Shares traded during $97.05, adult 2.7% on Tuesday.

Two other “deal stocks” with assertive MA activities in a remuneration estimate space—
Fidelity National Information Services
(FIS) and
Global Payments
(GPN)—also perceived Buy ratings. Goldman estimated that any company’s shares could benefit 22% and 18%, respectively, from stream prices.

Goldman also gave Buy ratings to
Open Lending
(LPRO), that provides an programmed near-prime loan height for financial institutions, and business payments company
FleetCor Technologies
(FLT), raised 28% and 21% upside potential, respectively, from their stream prices.

Square
(SQ) is rated Neutral due to a market’s overvaluation. Shares in a fintech surged some-more than 90% in a past 3 months as investors wish that Cash App, Square’s digital wallet product, will continue to expostulate more income from consumers as millions have newly combined accounts amid a pandemic.

“Consensus Cash App unrestrained could infer too confident near-term, pushing a change in concentration towards SQ’s core Seller Business that has been significantly impacted by a pandemic,” O’Neill said, indicating a underrated disastrous effect on a merchant-oriented segment.

Goldman’s 12-month cost aim for Square is $133. The batch traded during $120.35, adult 1.5%, on Tuesday.

Euronet Worldwide
(EEFT),
EVO Payments
(EVOP),
Evertec
(EVTC) and
Wex
(WEX) were also instituted during Neutral. Goldman put Sell ratings on
Automatic Data Processing
(ADP),
Paychex
(PAYX) and
Western Union
(WU).

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