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Atlantic Equities Prefers High-Quality Names Such as Visa, Downgrades Fiserv


Fiserv Inc (NASDAQ: FISV) was downgraded to Neutral by Atlantic Equities on Wednesday, with a price target of $105 set for the stock. The firm said it prefers Visa (NYSE: V) in a recession.

In a broad note about US payment companies, analysts said that Visa, which has an Overweight rating and a $230 price target at Atlantic, has a good price.

The analysts said that it is becoming more likely that the US and global economies will go into recession. Because of this, they are now predicting a small economic downturn in 2023 and think that payment stocks are starting to price in this possibility. Still, in the short term, they prefer high-quality stocks with attractive valuations and limited downside risk compared to consensus earnings forecasts.

Atlantic Equities Prefers High-Quality Names

“Visa stock has been under pressure lately because of the company’s reliance on travel as the economy slows down. Visa is still one of the best companies because it is benefiting from the long-term growth of M-HSD card volumes. It is also growing its services and new flows businesses, and its stock is trading at a 40% premium to the S&P 500 PE, which is close to an all-time low. ” The analysts said this. “The low relative valuation takes into account the cyclical worries, and we think the regulatory and disruption worries are still manageable.”

Analysts said that Clover helped Fiserv’s merchant business do better than its traditional competitors, but the company is now moving out of the way.

Even though the shares are only down 8% so far this year, the stock is now priced much higher than its peers. “Its long-term goals for Clover look too ambitious, and the company’s 3x leverage could weigh on estimates,” they wrote.


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