Shares of Fiserv Inc. FISV, +1.16% were rising 1.5% in morning trading Thursday after Evercore ISI analyst David Togut turned bullish on the merchant-acquiring stock, writing that the company is in the early stages of a transformation that seems to be paying off. “In the process, FISV has modified its historically successful playbook of maximizing free-cash flow, repurchasing 6% of stock annually, then repeat,” Togut wrote. “The new FISV invests more, acquires more, and occasionally shaves FCF targets to sustain higher organic revenue and earnings growth from its Merchant Acceptance and Payments & Networks businesses.” He likes that the company “turns the tables on its disruptive competitors” with its evolving strategy. Togut sees Fiserv as relatively well protected in the short run from rising interest rates given that most of its debt consists of fixed-rate obligations. He also cheered the “superior growth potential” of Clover, Fiserv’s payments and software offering for smaller businesses. Fiserv’s shares have risen about 17% over the past three months as the S&P 500 SPX, +0.87% has increased roughly 8%.
