GPN drops on analyst day updates; BTIG downgrades

Shares of Global Payments (NYSE:GPN ) fell sharply following updates following the company's investor day, with the stock closing down over 6% on Tuesday and dropping a further 0.8% in premarket trading on Wednesday.

The decline came after GPN presented a preliminary fiscal year 2025 outlook that fell below analysts' expectations, triggering concerns about the company's near-term growth potential.

Following the investor day, BTIG downgraded GPN from Buy to Neutral, citing limited visibility into the company's ability to accelerate growth beyond fiscal 2025. They also removed their price target for the stock.

According to BTIG, GPN's "transition" year in 2025 lacks clarity, putting the stock in a "wait-and-see" category for at least several quarters.

The investment bank noted that while GPN did a good job of addressing investor concerns, the need to accelerate growth in fiscal 2026 and beyond raises execution risks. BTIG also pointed to potential challenges in unifying GPN's numerous point-of-sale (POS) brands across the restaurant and retail sectors, adding further uncertainty.

Analysts at Citi, meanwhile, were more optimistic, maintaining a Buy rating on GPN despite the near-term headwinds.

They acknowledged the company's 2025 outlook was at the lower end of expectations but called it an "achievable baseline."

Citi highlighted GPN's operational transformation, including plans to streamline its business and unify its POS software under the Genius brand.

The changes, coupled with organizational restructuring and potential divestitures, could unlock long-term growth, they said.

Furthermore, Citi sees potential for $500 million in gross savings by the first half of 2027 as part of the company's broader transformation strategy.

While GPN's outlook for 2025 disappointed the market, Citi sees the potential for long-term growth if the company can successfully execute its transformation plan.

Source: Investing.com