Spinoff of POS could unlock major value for Global Payments - Mizuho

Investing.com - Global Payments Inc (NYSE:GPN) is navigating a complex business landscape, but could see potential upside according to an analyst note from Mizuho.

The company operates two distinct business arms, each facing its unique challenges.

First, its merchant acquiring and point-of-sale (POS) business is growing slower than its peers. Second, its issuer-processing business, while market-leading and stable, is also under threat from tech entrants and bank consolidation.

Over the past five years, GPN shares have underperformed compared to its peers and the broader market. This underperformance, according to Mizuho, is largely due to debates concerning the company's organic growth and potential market share loss in the merchant acquiring sector.

A key reason for this slower growth could be GPN's lack of a branded POS solution, a factor that has given competitors an edge in the North American POS industry.

Analysts noted that "the combination of a potential sale of the Merchant Solutions business and a spin-off of Issuer could unlock ~30% of value."

Mizuho maintains a neutral stance on the stock, with a price target of 105.