GPN – Markets expectations are for Uniform ROA to fade, but management is confident about growth, buybacks, and M&A

December 22, 2021

Global Payments (GPN) currently trades below corporate and near historical averages relative to Uniform earnings, with a 17.2x Uniform P/E (Fwd. V/E’).

At these levels, markets are pricing in expectations for Uniform ROA to fade to 44%, accompanied by 9% Uniform asset growth.

Meanwhile, analysts expect Uniform ROA to improve to 70% in 2022, accompanied by 1% Uniform asset growth.

If sustained going forward, these levels would imply a stock price closer to $153, representing approximately 20% equity upside for the firm.

Moreover, the firm’s most recent earnings call suggests management is confident about growth, buybacks, and M&A.

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