5 Reasons Cantor Fitzgerald Is Bullish On Global Payments

Cantor Fitzgerald has started coverage of Global Payments Inc (NYSE: GPN) with an Overweight rating driven by the company’s opportunity to grow revenue and margins through integration of Heartland Payment acquisition.

Global Payments is a merchant acquirer, which signs up card merchants or card members. Analyst Joseph Foresi pointed out the company’s global footprint, strong technology platform and OpenEdge as strong positives.

Catalysts Ahead

Following are the five potential catalysts behind Foresi’s bullish thesis on Global Payments:

1. Electronic payment growth, technology, international opportunities and consolidation (Heartland).
2. “The trends behind electronic payment (non-cash payments) remain strong with volumes growing 9 percent, reaching $389.7 billion in 201, according to Capgemini.”
3. “GPN can drive growth through acquisitions like the recent Heartland purchase (1–2 percent annual revenue growth synergies) and international expansion (2 percent currently).”
4. “New technologies can help drive growth, as there are now more than 1 billion digital buyers globally, and this represents only 15% of the world’s total population.”
5. “Future cost synergies are expected to help expand annual margins by +75 bps annually, including Heartland (vs. prior target of +50 bps).”

Analyst Commentary

That said, Foresi noted the company’s main risk is its large exposure to the financial services industry, as it is involved in the processing of each transaction. The analyst noted that the industry is vulnerable to adverse U.S. and global market and economic conditions.

Foresi sees a potential 19 percent upside in shares with his $93 price target.

At last check, shares of Global Payments were up 1.17 percent at $77.70.