Morgan Stanley has reduced its price target on Fiserv (NASDAQ:FISV) to $64.00 from $81.00 while retaining an Equalweight rating, reflecting a more conservative valuation stance on the payments and financial-technology company.
The bank lowered the multiple applied to its model to 7x price-to-earnings from 8x previously. That multiple was applied to Morgan Stanley’s revised fiscal 2027 adjusted earnings per share forecast of $9.17, down from a prior estimate of $10.13. Fiserv is trading at $62.59 at the time of the report and its current market P/E is 9.49, a level Morgan Stanley says is consistent with its observations on the company’s valuation.
In its analysis, Morgan Stanley noted that Fiserv is trading at a roughly 9x discount to its five-year average P/E multiple. The firm said the newly adopted 7x multiple sits in line with peers on a growth-adjusted basis, compared with a slight discount under the earlier approach.
A key driver of the adjustment is the strategic reset spearheaded by CEO Mike Lyons. Morgan Stanley described the strategy as one emphasizing increased investment, reduced dependence on price increases and other short-term revenue drivers, and a stronger focus on client satisfaction and building durable recurring revenues. The bank indicated these changes are meaningful but will likely need time to translate into measurable results.
According to Morgan Stanley, the initiatives under Lyons will probably require at least three to four quarters before producing observable impact. The firm said that consistent communication from management and reliable operational performance will be necessary for investor confidence to be rebuilt.
Separately, Fiserv reported fourth-quarter adjusted earnings that exceeded analyst expectations, while revenue fell slightly short of estimates. Those results were disclosed as part of the company’s latest financial reporting. Following the announcement, the company’s shares traded nearly flat, with the earnings beat providing a positive element and the revenue shortfall underscoring residual challenges.
Analysts and market participants are monitoring these mixed signals closely, as discrepancies between earnings and revenue outcomes can affect investor sentiment. The recent quarterly release and Morgan Stanley’s revised valuation together contribute to ongoing market and analyst assessments of Fiserv’s financial trajectory and execution under its revised strategy.