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The Financial Transaction Services industry is likely to be aided by the widespread adoption of digital means. To capitalize on the trend, the industry players remain equipped with efficient digital solutions suite built on collaborations and technology investments. Consumer spending habits remain favorable, which may boost transaction volumes. An uptick in cross-border volumes results from a growing international workforce and international trade. Possible interest rate cuts in 2024 are expected to make way for rebounding merger and acquisition (M&A) deals. Companies like Visa Inc. V , Mastercard Incorporated MA , Fiserv, Inc. FI , Fidelity National Information Services, Inc. FIS and Global Payments Inc. GPN are placed well to gain from the industry's encouraging growth prospects.

About the Industry

The Zacks Financial Transaction Services industry is part of the Financial Technology or the FinTech space, which includes companies with varying natures of businesses. The industry comprises card and payment processing and other solutions providers, ATM services and money remittance service providers and providers of investment solutions to financial advisors. The players in this segment operate their unique and proprietary global payments network that links issuers and acquirers around the globe to facilitate the switching of transactions, permitting account holders to use their products at millions of acceptance locations. Monetary transactions are effectuated through these networks, offering a convenient, quick and secure payment method in several currencies across the globe. The industry is benefiting from the ongoing digitization movement triggered by the pandemic.

4 Trends Influencing the Financial Transaction Services Industry's Future

A Rapidly Expanding Digital Era: The widespread adoption of digital means across every sphere of life provides a perfect ground for industry participants to capitalize on through an enhanced digital solutions suite. They pursue significant technology investments to come up with several flexible digital payment options such as cryptocurrency, biometrics, QR codes and buy now, pay later solutions. Additions of such lucrative solutions, that promise to ease everyday digital payments, within one's portfolio inevitably attract a higher number of customers and diversify the revenue streams of the companies. Apart from building a solid payment solutions suite, the industry participants also remain equipped with effective fraud prevention solutions to counter sophisticated forms of cybercrimes.

Favorable Consumer Spending: Consumers' affinity to spend more results in increased utilization of product and services suite of the industry participants. Therefore, the resultant benefit of increased consumer spending is reaped by them in the form of processing higher transaction volumes and subsequently earning higher revenues. Per Fitch Ratings, consumer spending was resilient across the United States in 2023, and strong wage gains, moderated inflation level and favorable consumer sentiment positively impacted the metric. The continued positive sentiment and excess savings made by consumers made Fitch revise the 2024 forecast for annual real consumer spending from 0.6% to 1.3%.Loading… Loading…

Solid Cross-Border Volumes: Financial transaction service stocks, having exposure to the cross-border business, benefit from an opportunity to process higher cross-border volumes as a result of an expansion in international trade and steady demand for efficient remittance services. According to The Brainy Market Insights, the global cross-border payments market is anticipated to witness an 8% CAGR over 2024-2033. Companies with enhanced cross-border payment solutions will be a lucrative option as they seamlessly process international transactions and manage currency exchange and settlement. The solutions portfolio remains of great use in enabling easy acceptance of payments from customers across different countries, sending supplier payments and, therefore, ensuring smooth business operations. The emergence of a rising international workforce sustains the solid demand for efficient cross-border remittance services.

Pursuit of the M&A Strategy: For building a digital solutions suite, the Financial Transaction Services industry players resort to a M&A strategy in addition to undertaking technology investments. These initiatives are essential means to expand capabilities, bring diversification benefits, boost customer base and solidify global presence. As the Fed points to possible interest rate cuts in 2024, borrowing costs are expected to witness a decline, thereby making it easier for industry participants to opt for loans to enter M&A deals and avoid complete exhaustion of cash reserves. After facing a roadblock in 2023, M&A activities are expected to rebound in 2024, per Morgan Stanley Investment Banking.

Zacks Industry Rank Instills Optimism

The group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all member stocks, indicates bright near-term prospects. The Zacks Financial Transaction Services industry is housed within the broader Zacks Business Services sector. It currently carries a Zacks Industry Rank #73, which places it in the top 29% of more than 250 Zacks industries.

Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. The industry's positioning in the bottom 50% of the Zacks-ranked industries is a result of a negative earnings outlook for the constituent companies in aggregate.

Before we present a few stocks that you may want to buy or retain in your portfolio, let's take a look at the industry's recent stock-market performance and valuation picture.

Industry Outperforms Sector But Lags S&P 500

The Zacks Financial Transaction Services industry has outperformed its sector but underperformed the Zacks S&P 500 composite year to date.

In the said time frame, the industry has gained 6.2% compared with the Business Services sector's rally of 5.2%. The S&P 500 has gained 7.7% in the same time frame.Year-To-Date Price Performance

Industry's Current Valuation

On the basis of the forward 12-month Price/Earnings ratio, commonly used for valuing financial transaction services stocks, the industry is currently trading at 23.04X compared with the S&P 500's 20.88X and the sector's 25.44X.

Over the last five years, the industry traded as high as 32.49X, as low as 17.61X and at the median of 25.04X.Forward 12-Month Price/Earnings (P/E) Ratio

5 Stocks to Keep a Close Eye on

We are presenting five stocks from the Financial Transaction Services industry that currently carry a Zacks Rank #3 (Hold). Considering the current industry scenario, it might be prudent for investors to retain these stocks in their portfolio, as these are well-placed to generate growth in the long haul.

Visa: Visa, headquartered in San Francisco, is one of the world's leaders in digital payments. Numerous acquisitions, alliances and expanding payments volume continue to drive revenues of the company. Several digital solutions such as Visa Token Service, Visa Checkout and Visa In-App Provisioning have been developed by V in recent years to upgrade its digital platform. Investments worth $10 billion have been made by the leader in digital payments over the past five years in technology and innovation.

The Zacks Consensus Estimate for Visa's fiscal 2024 earnings is pegged at $9.89 per share, indicating a 12.8% rise from the year-ago reported figure. V's earnings beat estimates in each of the last four quarters, the average being 4.09%.Price and Consensus: V

Mastercard: The Purchase, NY-based company frequently resorts to tie-ups with financial institutions or undertakes significant investments to occupy a significant share in the global payments market. The Mastercard Cross-Border Services platform imparts customers the capability of safely conducting cross-border money trasfers across 30 countries. Its strategic acquisitions bolster its operational capabilities.

The Zacks Consensus Estimate for Mastercard's 2024 earnings is pegged at $14.35 per share, indicating a 17.1% rise from the year-ago reported figure. MA's earnings beat estimates in each of the last four quarters, the average being 3.49%.Price and Consensus: MA

Fiserv: Based in Brookfield, WI, Fiserv provides a varied array of products and services. The diverse product and service portfolio enables the company to serve various segments of the financial services industry. Its acquisitions of Skytef and Sled in 2023 are expected to facilitate the augmentation of the company's distribution network.

The Zacks Consensus Estimate for Fiserv's 2024 earnings is pegged at $8.62 per share, indicating a 14.6% rise from the year-ago reported figure. FI's earnings beat estimates in three of the last four quarters and matched the mark once, the average being 1.04%.Price and Consensus: FI

Fidelity National: The Florida-based FIS benefit from the sound performances of its Banking Solutions and Capital Market Solutions segments. The company pursues organic growth strategies and acquisitions, which, in turn, continue to fetch multi-year recurring contracts. Fidelity National comes up with advanced solutions in a bid to boost its client base and expand across addressable markets.

The Zacks Consensus Estimate for Fidelity National's 2024 earnings is pegged at $4.66 per share, which indicates an improvement of 38.3% from the year-ago reported figure. The consensus mark for 2024 earnings has moved 3.1% north over the past 60 days.Price and Consensus: FIS

Global Payments: Headquartered in Atlanta, GA, Global Payments is aided by strong contributions from the Merchant Solutions and Issuer Solutions segments. Merchant Solutions' performance benefits on the back of higher transaction volumes. It resorts to acquisitions, partnerships and joint ventures for enhancing capabilities and boosting business scale. Buyouts remain one of the management's priorities to allocate capital.

The Zacks Consensus Estimate for Global Payments' 2024 earnings is pegged at $11.62 per share, indicating an 11.5% rise from the year-ago figure. GPN's earnings beat estimates in each of the last four quarters, the average being 2.04%.Price and Consensus: GPN

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Entertainment

Tomorrowland: ‘Devastating’ blaze destroys main stage at major festival – two days before it was due to begin

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Tomorrowland: 'Devastating' blaze destroys main stage at major festival - two days before it was due to begin

A huge fire has destroyed the main stage of a major festival in Belgium – two days before it was due to begin.

Tomorrowland is a dance music event as big as Glastonbury – and David Guetta was due to perform.

Footage showed flames and thick plumes of black smoke engulfing the stage and spreading to nearby woodland on Wednesday.

fire destroyed the main stage at the Tomorrowland festival site in Belgium
Image:
The fire gutted the main stage


 fire which destroyed the main stage at the Tomorrowland festival site in Belgium
Image:
Fire crews attempt to bring the blaze under control

The annual festival in the town of Boom, north of Brussels, is one of the biggest in Europe and attracts about 400,000 people over two consecutive weekends.

It is famous for its immersive and elaborate designs and attracts big names within dance music – including Guetta, best known for tracks When Love Takes Over and Titanium.

Dutch DJs Martin Garrix and Charlotte de Witte were also due to perform, along with the likes of Swedish House Mafia, Eric Prydz and Alok.

A fire destroyed the main stage at the Tomorrowland festival site in Belgium
Image:
Black smoke could be seen rising into the sky


The festival’s website described the creative elements which went into the elaborate main stage.

More on Belgium

The theme, described as Orbyz, was “set in a magical universe made entirely out of ice” and “full of mythical creatures”.

Read more from Sky News:
Ticketless Oasis fans blocked from gig
American Idol executive shot dead

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Listen to The World with Richard Engel and Yalda Hakim every Wednesday

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Organisers said no one was injured in the blaze but confirmed “our beloved main stage has been severely damaged”, adding they were “devastated”.

Spokesperson Debby Wilmsen added: “We received some truly terrible news today. A fire broke out on the Tomorrowland site … and our main stage was essentially destroyed there, which is truly awful.

“That’s a stage that took years to build, with so much love and passion. So I think a lot of people are devastated.”

Spokesperson Debby Wilmsen who said fire destroyed the main stage at the Tomorrowland festival site in Belgium
Image:
Spokesperson Debby Wilmsen told reporters ‘a lot of people are devastated’

Despite the fire, Tomorrowland organisers said they were still expecting 38,000 festivalgoers at DreamVille, the event’s campsite.

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Politics

PM criticised over ‘appalling’ decision to suspend four Labour MPs

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Starmer suspends four Labour MPs for breaches of party discipline

Sir Keir Starmer has suspended four MPs for repeated breaches of party discipline.

Brian Leishman, Chris Hinchliff, Neil Duncan-Jordan and Rachael Maskell have lost the whip, meaning they are no longer part of Labour’s parliamentary party and will sit as independent MPs.

The suspension is indefinite pending a review.

Three other MPs have had their trade envoy roles removed: Rosena Allin Khan, Bell Ribeiro-Addy and Mohammed Yasin.

Politics latest: Suspended MPs defend their voting record

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Starmer cracks the whip – will it work?

All seven had voted against the government’s welfare reforms earlier this month. However, it is understood this is not the only reason behind the decision, with sources citing “repeated breaches of party discipline”.

More than 100 MPs had initially rebelled against the plan to cut personal independent payments (PIP). Ultimately, 47 voted against the bill’s third reading, after it was watered down significantly in the face of defeat.

Ms Maskell was one of the lead rebels in the welfare revolt, and has more recently called for a wealth tax to fund the U-turn.

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‘There are lines I will not cross’

The York Central MP has spoken out against the government on a number of other occasions since the election, including on winter fuel and cuts to overseas aid.

Confirming the suspension, Ms Maskell told Sky News that she “doesn’t see herself as a rebel” but “somebody that is prepared to fulfil (her) role here of holding the executive to account and speaking truth to power”.

She stopped short of criticising the decision, saying: “I hold my hand out to the prime minister and hope he takes that and wants to reach back because I think it’s really important that we work together.”

Ms Maskell was first elected in 2015, while the other suspended MPs were newly elected last year.

Mr Hinchliff, the MP for North East Hertfordshire, has proposed a series of amendments to the flagship planning and infrastructure bill criticising the government’s approach.

Mr Duncan-Jordan, the MP for Poole, led a rebellion against the cut to the winter fuel payments while Alloa and Grangemouth MP Mr Leishman has been critical of the government’s position on Gaza.

Suspended Labour MPs clearly hit a nerve with Starmer


Tamara Cohen

Tamara Cohen

Political correspondent

@tamcohen

After a tricky few weeks for the government, in which backbenchers overturned plans to cut back welfare spending, now a heavy hand to get the party into line.

All four suspended MPs appear to be surprised – and upset.

Three more have lost plum roles as trade envoys – all on the left of the party.

All were active in the rebellion against the government’s welfare reforms, and voted against the changes even after a series of U-turns – but were among 47 Labour MPs who did so.

When MPs were told after the welfare vote that Number 10 was “fully committed to engaging with parliamentarians”, this was not what they were expecting.

We’re told the reasons for these particular suspensions go wider – over “persistent breaches of party discipline” – although most are not high profile.

In the scheme of things, Jeremy Corbyn and John McDonnell rebelled against the Labour whip hundreds of times under New Labour, without being suspended.

But these MPs’ pointed criticism of the Starmer strategy has clearly hit a nerve.

Read Tamara’s analysis in full here

‘Couldn’t support making people poorer’

Mr Duncan-Jordan told Sky News that he understood speaking out against benefit cuts would “come at a cost” but said he “couldn’t support making disabled people poorer”.

Mr Leishman echoed that sentiment, saying: “I firmly believe that it is not my duty as an MP to make people poorer, especially those that have suffered because of austerity and its dire consequences.”

Both said they remain committed to the Labour Party and its values, suggesting they have no plans to join the new party being set up by former Labour leader Jeremy Corbyn and ousted MP Zarah Sultana.

Similarly Mr Hinchliff said in a brief statement: “I remain proud to have been elected as a Labour MP and I hope in time to return to the Labour benches.”

The suspensions will be seen as an attempt to restore discipline ahead of the summer recess following a number of rebellions that has forced the government into U-turns.

As well as watering down the welfare bill, some cuts to the winter fuel payment have been reversed, leaving Chancellor Rachel Reeves with a fiscal blackhole to fill.

However, the move risks creating further divisions with a number of Labour MPs criticising the decision.

Read more:
Who are the suspended Labour MPs?

Prime Minister Sir Keir Starmer. File pic: PA
Image:
File pic: PA

Starmer ‘rolling out the carpet to Reform’

Ian Byrne, Labour MP for Liverpool West Derby, said he was “appalled” by the suspensions as he and 44 others voted against welfare cuts.

He said this isn’t the first time the Starmer leadership has “punished MPs for standing up for what’s right”, as he and six others were suspended last year for voting against the two-child benefit cap.

“These decisions don’t show strength. They are damaging Labour’s support and risk rolling out the red carpet for Reform,” he added.

Richard Burgon, who was also temporarily suspended in the two-child benefit cap revolt, said he had hoped the leadership would take a different approach to backbenchers.

“Sadly, it isn’t yet doing so. To help stop a Reform government, it really must do so,” he said.

Jon Trickett, Labour MP for Normanton and Hemsworth, said “it’s not a sin to stand up for the poor and disabled”, adding: “Solidarity with the suspended four.”

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World

Tomorrowland: ‘Devastating’ blaze destroys main stage at major festival – two days before it was due to begin

Published

on

By

Tomorrowland: 'Devastating' blaze destroys main stage at major festival - two days before it was due to begin

A huge fire has destroyed the main stage of a major festival in Belgium – two days before it was due to begin.

Tomorrowland is a dance music event as big as Glastonbury – and David Guetta was due to perform.

Footage showed flames and thick plumes of black smoke engulfing the stage and spreading to nearby woodland on Wednesday.

fire destroyed the main stage at the Tomorrowland festival site in Belgium
Image:
The fire gutted the main stage


 fire which destroyed the main stage at the Tomorrowland festival site in Belgium
Image:
Fire crews attempt to bring the blaze under control

The annual festival in the town of Boom, north of Brussels, is one of the biggest in Europe and attracts about 400,000 people over two consecutive weekends.

It is famous for its immersive and elaborate designs and attracts big names within dance music – including Guetta, best known for tracks When Love Takes Over and Titanium.

Dutch DJs Martin Garrix and Charlotte de Witte were also due to perform, along with the likes of Swedish House Mafia, Eric Prydz and Alok.

A fire destroyed the main stage at the Tomorrowland festival site in Belgium
Image:
Black smoke could be seen rising into the sky


The festival’s website described the creative elements which went into the elaborate main stage.

More on Belgium

The theme, described as Orbyz, was “set in a magical universe made entirely out of ice” and “full of mythical creatures”.

Read more from Sky News:
Ticketless Oasis fans blocked from gig
American Idol executive shot dead

Follow The World
Follow The World

Listen to The World with Richard Engel and Yalda Hakim every Wednesday

Tap to follow

Organisers said no one was injured in the blaze but confirmed “our beloved main stage has been severely damaged”, adding they were “devastated”.

Spokesperson Debby Wilmsen added: “We received some truly terrible news today. A fire broke out on the Tomorrowland site … and our main stage was essentially destroyed there, which is truly awful.

“That’s a stage that took years to build, with so much love and passion. So I think a lot of people are devastated.”

Spokesperson Debby Wilmsen who said fire destroyed the main stage at the Tomorrowland festival site in Belgium
Image:
Spokesperson Debby Wilmsen told reporters ‘a lot of people are devastated’

Despite the fire, Tomorrowland organisers said they were still expecting 38,000 festivalgoers at DreamVille, the event’s campsite.

Continue Reading

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