The recent selloff of Global Payments shares presents a prime buying opportunity for investors, according to Goldman Sachs. Analyst Will Nance upgraded Global Payment shares to buy. His price target of $127 implies that shares could rally 20% over the next 12 months from Tuesday’s close. The firm said that, despite ongoing concerns about weakening consumer spending, the company has managed to post an approximate 8% compound annual growth rate in revenue since 2019. “Looking ahead into 2023, although we believe the risk of a consumer slowdown remains, recent commentary from other companies in the industry … suggest consumer spend in the 1st quarter has rebounded off a slower December (though limited March data points suggest a slowdown), which should provide support in GPN reaching its [high single digits/low double-digits] (w/ M & A) merchant growth targets,” Nance wrote in a Wednesday note. The analyst thinks that recent mergers and acquisitions Global Payments has undertaken should simplify business and put it on track towards “the highest growth vertical.” “While we see the combination of all the recently announced deals as relatively neutral to near term numbers (modestly dilutive in ’23), we believe the amount of outstanding strategic activity and resulting complexity of the story has been an overhang for investors, and we believe the closing of recent M & A should be a catalyst for investors to re-engage,” Nance said. Global Payment shares have climbed by 6.5% in 2023. However, the stock has declined 21% over the past 12 months as the company faced currency headwinds. But, Goldman Sachs said investors have become too negative around the share loss narrative for the stock. “We see current multiples as already compelling, and on a proforma basis, valuation becomes even more attractive, particularly relative to other large cap acquirers with structurally lower growth rates as a result of their lower mix of merchant acquiring vs banking software,” Nance wrote. GPN YTD mountain Global Payments stock —CNBC’s Michael Bloom contributed to this report.
