Investing.com -- Bernstein downgraded Global Payments (NYSE:GPN) to Market Perform from Outperform on Tuesday, citing a lack of clear catalysts in the near term to drive the stock higher.
While the company's valuation remains reasonable, analysts expressed concerns about churn risks and the absence of meaningful growth triggers until mid-2025.
"We struggle to see upside catalysts over the next few months," Bernstein stated, highlighting that the company's 2025 guidance reset has already factored in much of the anticipated challenges.
A key concern involves the ongoing unification of its retail and restaurant point-of-sale (POS) brands under the Genius platform.
Bernstein highlighted potential churn dynamics arising from this consolidation as a point of uncertainty.
While Global Payments plans to deploy funds from divestitures and stock buybacks starting in mid-2025, Bernstein noted that these actions are unlikely to impact the stock meaningfully in the short term.
"We see the next potentially positive catalysts likely in mid-2025 as buybacks (also including funds from divestitures) kick in, and we are able to see momentum from the turnaround plan," the analysts explained.
The downgrade reflects a broader theme across the payments sector, where slowing consumer spending growth and increasing competition are posing challenges.
Bernstein mentioned that "2024 is shaping up to be a narrative changing year for many payment companies as underlying secular growth slow (especially in the US), and competition intensifies."
Amid these headwinds, Bernstein favors other payment stocks, including Mastercard (NYSE:MA), which it said benefits from international exposure and a diversified services portfolio, making it better positioned than some of its peers.
For Global Payments, however, the path to renewed momentum appears more distant, with meaningful progress expected only in the second half of 2025.