RBC Capital Reduces Target Price on Fidelity National Information Services (FIS) to $69 on Slight Q4 Earnings Miss

Core Insights - Fidelity National Information Services Inc. (FIS) is identified as one of the most undervalued stocks on the NYSE according to analysts [1] - RBC Capital has reduced its target price for FIS by 19.8% to $69, citing a fourth-quarter earnings miss and below-consensus guidance for 2026 as reasons for the adjustment, while maintaining an Outperform rating [2][7] Financial Performance - FIS reported fourth-quarter 2025 earnings with diluted adjusted EPS of $1.68, slightly missing the street consensus of $1.69, although it exceeded revenue expectations of $2.81 billion compared to the consensus of $2.74 billion [2] - The earnings miss indicates that profit margins did not expand as anticipated by analysts [2] - Management provided Q1 2026 guidance with an adjusted EPS forecast of $1.26 to $1.30, which is below the consensus estimate of $1.34, again attributed to lower-than-expected margins despite revenue guidance exceeding analyst estimates [3] Cash Flow and Future Outlook - Despite the earnings and guidance disappointments, FIS demonstrated strong cash flow generation, with free cash flow growth outpacing earnings growth [4] - Management expects free cash flows in 2026 to grow by 27% to 33% year-over-year, compared to an adjusted EPS growth of 8% to 10% [4] - FIS provides banking and capital markets solutions for financial institutions and businesses, and is based in Jacksonville, Florida, founded in 1968 [4]