FIS downgraded to Neutral at Credit Suisse on disappointing FY23 outlook

As previously reported, Credit Suisse analyst Timothy Chiodo downgraded FIS to Neutral from Outperform with a price target of $75, down from $85. Though cost savings targets were increased alongside the announcement of plans for a Worldpay spinoff, the Merchant segment’s revenue growth is expected to turn negative in FY23 and the overall FY23 revenue outlook for the combined company was "disappointing," the analyst tells investors. While "relatively positive" on the longer-term prospects for the RemainCo, a combination of near-medium term revenue headwinds across both Banking and Merchant, deeper cost savings that have the potential to impact topline trends, and continued investment by competitors, particularly for the Merchant business, make it more challenging for the firm to recommend the stock, Credit Suisse said.