Wedbush analysts continue to see overall volume growth rates for payment stocks in the third quarter moderating on a year-over-year basis, while being relatively "flattish" quarter over quarter.
In a note to clients, they highlighted a number of relevant trends including consistent growth moderation in credit purchases as well as credit transactions, a likely reduction in large ticket (discretionary) item sales, continued declines in average ticket prices (credit cards); as well as moderating quarter over quarter growth in travel volumes.
"Bottom line, we remain defensive ahead of the print (financial results), favoring companies with relatively resilient models, strong free cash flow, GAAP earnings and relatively attractive valuations," the analysts wrote.
Their top picks in the space are Visa Inc (NYSE:V), Fiserv Inc (NASDAQ:FISV), Global Payments Inc, and Fidelity National Information Servcs Inc, while they remain neutral on Marqeta Inc, Paymentus Holdings Inc, and Block Inc (NYSE:SQ).
As for “deep value” PayPal Holdings Inc (NASDAQ:PYPL), analysts at Wedbush believe the stock is capped at current levels, pending new CEO’s communicating vision/strategy to the Street.
Contact Sean at sean@proactiveinvestors.com