Fidelity National Information Services (FIS) shares rallied 8.7% in the last trading session to close at $74.58. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 7.7% loss over the past four weeks.
Shares of Fidelity National jumped after announcing a major strategic move: it’s selling its remaining stake in Worldpay to Global Payments in a deal valued at $6.6 billion and acquiring Global Payments’ Issuer Solutions business for $13.5 billion. Investors cheered the move as a smart realignment, offloading a less synergistic asset while strengthening FIS’s core capabilities in banking tech.
This banking and payment technologies company is expected to post quarterly earnings of $1.20 per share in its upcoming report, which represents a year-over-year change of +9.1%. Revenues are expected to be $2.5 billion, up 1.4% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Fidelity National, the consensus EPS estimate for the quarter has been revised marginally higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on FIS going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Fidelity National is a member of the Zacks Financial Transaction Services industry. One other stock in the same industry, Global Payments (GPN), finished the last trading session 17.4% lower at $69.46. GPN has returned -14.3% over the past month.
Global Payments' consensus EPS estimate for the upcoming report has changed -0.7% over the past month to $2.72. Compared to the company's year-ago EPS, this represents a change of +5%. Global Payments currently boasts a Zacks Rank of #3 (Hold).
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This article originally published on Zacks Investment Research (zacks.com).
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