Fidelity National Information Services

Fidelity delivered a strong result for the past quarter, surpassing Wall Street expectations in terms of revenues as well as earnings. The company’s organic revenue growth of 8% for the quarter and 9% for the first half of the year, fueled by solid top-line results attained by each of its operational sectors, has exceeded the management’s expectations. They had a really good quarter of core wins in banking, demonstrating sustained strength in their conventional banking channel. With ANZ Banking Group, the second-largest bank in Australia and New Zealand, they found their first significant bank outside of the United States this quarter. Furthermore, as Fidelity shifts to new market growth, they are benefiting from the growing demand for Banking-as-a-Service solutions as banks look to expand their traditional distribution to end consumers through fintech in order to generate new revenue streams. They also want to use their embedded finance ecosystem. On the other hand, they keep expanding into new regions and adding distinctive new solution capabilities, like their latest Guaranteed Payments product. We give the stock a ‘Overperform’ rating with a revised target price.