Global Payments Post-Worldpay: Balanced Risk-Reward, Strong Cash Returns but Tempered Near-Term Upside Supporting Hold Rating

In a report released today, Timothy Chiodo from UBS maintained a Hold rating on Global Payments, with a price target of $93.00.

Timothy Chiodo has given his Hold rating due to a combination of factors related to Global Payments’ post-Worldpay transaction profile. He acknowledges that the acquisition of Worldpay, coupled with the sale of the Issuer Solutions business to FIS, should generate meaningful cost savings and incremental revenue over the next three years, and that the deal is expected to be modestly accretive to earnings initially, with stronger accretion thereafter. At the same time, he recalibrates expectations for 2025 adjusted EBITDA to a lower level than originally outlined at the deal announcement, reflecting the removal of divested businesses, the full expensing of stock-based compensation, and the current earnings base of the acquired operations. These adjustments temper the near-term upside relative to prior targets and help explain the more neutral stance.

Chiodo also highlights the company’s strong free cash flow outlook and its plans for substantial capital returns, with management targeting significant cash generation by 2028 and sizable buybacks and/or dividends over 2025–2027. However, this positive cash return profile is balanced against leverage metrics and the execution risk tied to achieving the sizable cost and revenue synergy goals, as well as integrating Worldpay and realizing efficiencies after stand-up costs. The combination of solid long-term potential, but moderated 2025 earnings base and integration/synergy delivery risk, leads him to conclude that the risk‑reward profile is broadly balanced at current levels, supporting a Hold rather than a more aggressive rating.

In another report released today, Truist Financial also maintained a Hold rating on the stock with a $85.00 price target.