J.P. Morgan Maintains Fiserv (FISV) Neutral Rating

J.P. Morgan analyst Tien-tsin Huang maintained a Neutral rating for shares of Fiserv, Inc. (Nasdaq: FISV), with a price target of $54 per share.

The analyst said that Jeff Yabuki, CEO of Fiserv, Inc., addressed several topics at the J.P. Morgan Global TMT
Conference.

Yabuki expressed confidence in Fiserv's bill pay contract with Bank of America Corporation (NYSE: BAC).

Although there has been some concern that Bank of America Corporation might move Fiserv's work in-house, Yabuki noted that the two companies have a business relationship that goes back fifteen years and that the contract was extended for five years in 2008.

The J.P. Morgan analyst wrote, "FIS separately confirmed that it is evaluating strategic alternatives. Prior to the FIS announcement that it is exploring an LBO or a leveraged recap, Mr. Yabuki suggested that potential private equity interest in FIS highlighted the attractiveness of the financial technology provider business – with its recurring revenues and strong free cash flow generation. Mr. Yabuki indicated he was surprised that the debt markets had recovered to the point that valuation and debt multiples would reach the levels being discussed in the media (e.g. the Wall Street Journal). His view is that a private FIS would mean fewer public companies for investors interested in financial tech businesses, and he also seemed to us to imply that FISV would be more competitive vs. a privately owned FIS. He did not think that there would be an inherent change in the perception of FIS (with leverage) by customers, prospects, or regulators."