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Analyst Blog

On Jan 11, 2014, Zacks Investment Research upgraded Fidelity National Information Services to a Zacks Rank #1 (Strong Buy). With a strong return of 42.5% over the past one year and a positive estimate revision trend, Fidelity is an attractive investment opportunity.

Why the Upgrade?

We upgraded the stock on the back of strong 2014 outlook. Continuing organic growth, growing customer base and margin expansions driven by solid demand for the company’s products are the primary reasons behind this expectation.

Fidelity continues to add new clients in North America, particularly from the banking industry. During the fourth quarter (ended Dec 2013), the company signed a deal with Beneficial Bank of Philadelphia.

International sales are also expected to drive growth, as the company continues to win new awards. Fidelity’s solutions were selected by Bharatiya Mahila Bank Ltd., India’s first women-focused public sector bank, during the quarter.

Fidelity expects 2013 revenues (reported and organic) to grow in the range of 4.0% to 5.0%. The current Zacks Consensus Estimate for revenues is pegged at $6.06 billion, which is in line with the lower end of the guided range.

Fidelity expects 2013 earnings to be in the range of $2.80 to $2.87 (prior outlook was $2.77 and $2.87) per share.

Earnings Estimate Revision

Fidelity is expected to report stable fourth-quarter fiscal 2013 results on Feb 5, 2014. The Zacks Consensus Estimate has remained constant at 67 cents per share over the last 60 days.

The Zacks Consensus Estimate for fiscal 2013 has remained steady at $2.09 per share over the last 60 days. For fiscal 2014, the Zacks Consensus Estimate increased a penny to $2.57 per share over the same period.

Other Stocks to Consider

Investors can also consider other technology stocks that are doing well right now. These include Netflix , Zillow and CIT Group . All these stocks carry the same rank as Fidelity.

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