美洲航空航天与防务-图片中的航空航天-2022年9月

__+1(212)357-7438|will.nance@GoldmanSachs&Co.LLC++1(212)357-7438|will.nance@GoldmanSachs&Co.LLC+1(801)884-4313|alex.toepfer@GoldmanSachs&Co.LLC+1(917)343-6326|rajul.bothra@GoldmanSachs&Co.LLC+1(212)357-3560|jack.evans@GoldmanSachs&Co.LLC+1(801)744-0801|katie.huffert@GoldmanSachs&Co.LLCconcernsovercontinuedelevatedinflationandcontinuedrevisionstothepathofinterestratesdrovemarketsbacknearthelows.Withinourcoverage,largercapnameshaveledthewaylower,whereasourgrowthiercoveragehasheldinslightlybetter.Overallweseemixedtrendsinthegroup,asmacrotailwindsfromreopeningoverthepastyearhavelikelystartedtoshifttoheadwindsasconsumerconfidenceweakens,FXisasignificantheadwindtointernationalrevenues,anduncertaintyisrelativelyhigh,makingitdifficultformgmtteamstoassuagefearsintotheremainderoftheyear.Againstthisbackdrop,belowweoutlineourthoughtsonthespaceintothequarter.Largecaps:Sentimenthasdeterioratedinthelargecapnames,particularlyaroundV/MA,asthestockshavelaggedonwhatwebelieveisacombinationofpositioning,FXheadwinds,andlimitednear-termcatalystsforoutperformance.Withinvestorsfocusedondownsiderisks,including1)FXheadwinds(all),2)stallingout/retracementofcrossborderrecovery(V/MA)and3)UKspendingweakness(FIS)andmargins(FISV),webelievethebarisfairlylowforthegroupintotheprint,althoughitisunclearwhatleversthecompanieshavetooffsettheseimpacts.OurtoppicksamonglargecapsinthespaceareVandFIS,bothwhichwebelieveshouldhavehighlydefensiveearningsinadownturnandarebothtradingathighlyattractivevaluationsinourview.Thatsaid,intothequarter,wepreferFISaswebelievesentimentisbeginningtoturnasinvestorslookforan“allclear”signonde-riskednumbers(whichwethinkisEPSinthe~$7.30-$7.40rangefornextyear).Ontheotherhand,wearesomewhatcautiousonFISVmarginexpansionin3Q,althoughweexpectrevenuedynamicstoholdinwell.Growth/SMID:SMIDcapandgrowthassetshavemeaningfullyoutperformedlargercapnamesinourcoverage,asthesecompanieshadbeenveryweakyeartodateandgenerallyguidedconservativelyintothebackhalfoftheyear.Whilewethinkthebarislikelyhigherintothisquarter’sprintsgiventherelativeperformance,wearemostconstructiveintothequarteronPAYO(interest),TOST(SoftwareARPU),HOOD(toplinebeat+costsaves)andFLYW(WPMsynergies),whilewearesomewhatmorecautiousonGLBE(FX,EUmacro)andWU(outlook).WealsoGoldmanSachsdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.ForRegACcertificationandotherimportantdisclosures,seetheDisclosureAppendix,orgo/research/hedge.html.Analystsemployedbynon-USaffiliatesarenotregistered/qualifiedasresearchanalystswithFINRAintheU.S.__expectsolidprintsforFOUR(grossmargin)andESMT(SMB),butweacknowledgerecentstrongstockperformancesetsupahigherbarintoearnings,andsoourviewismorebalancedintoearnings.FXheadwindslikelytoweighonfull-yearguidesacrosstheboard:WiththeUSDstrengtheningby19%YTDand9%sinceJune,weexpectFXtotakeabiteoutofexpectationsfortheremainderoftheyearandinto2023.Overallweseeanincremental1-2%impactonaverageversuspriorfull-yearoutlooks(2-4%onarunratebasisinthebackhalfoftheyear).Intermsofbestandworstpositioned,wewouldhighlightGLBE(-3.9%revimpact)andFLYW(-2.4%revimpact)andV/MA(~2%toplineimpact)asmostimpacted,whilePAYO(-0.6%revimpact,+veEBITDAimpact)screensasanetbeneficiaryasaresultofitsheavilyinternationalweightedexpensebaseandlargelyUSDdenominatedrevenues.DeeperDive:WhattodowithFIS?Underperforminggrowthstock,orattractivevaluestock?Withsharesdown~27%since2Q22earningsandinvestors’sentimenthighlymixed,wetakeafreshlookateachsegmenttohelprebaseexpectationsforthecompanyafter1-2yearsofmixedperformanceversuspeers(particularlyinmerchant).WhilemuchoftheconversationrevolvesaroundwhetherFIScankeeppacewithgrowthierpeersinthepaymentsspace,at~11x2023EPS,webelievethestoryishighlycompellingfromavaluelense,andcapableofdeliveringdouble-digitEPSgrowthbeyondnextyear,evenwithMerchantgrowthtrailingthemarketandwithelevatedlevelsofinvestmentspendinginBanking.Ourbottom-upworkonrevenueexpectationsandincrementalmarginsbybusinesslinesuggeststhatFIScouldpointtothelowerendofitslongtermtargetsasthenewmgmt/IRteamlooktoresetthenarrativeandinvestorexpectations.Wenowsee~6-7%toplinegrowth(incl~8-9%inmerchant)asourbasecase,withmarginexpansioninthe50-60bpsrange(includinglimitedmarginexpansioninBankingsolutionsasthecompanycontinuestobuildoutitsMBPplatform).However,giventhesignificantunderperformanceandStreetnumbersalreadysittingatthelowendofFIS’stargets,webelievethisisfairlywellunderstood,andat~$7.352023EEPS,webelievetheriskrewardishighlyfavorable.OurSOTPsuggests~38%upsidetoshares,andwebelievethecurrentvaluationiseffectivelypricinginverylittlevalueforthemerchantbusiness.Wewouldlookoverthenext2quartersformgmttoresetthebar,aswellasdeliversomeincrementalefficiencyinitiativesonthecostsideascatalystsforsharetore-rate.October2__GS3Q22EGrossProfitvConsensus100%8100%80%15.0%1515.0%14.0%60%10.0%10.0%6.8%20%4.7%5.0%3.7%5.0%3.7%3.0%2.1%0.6%0.0%-20%0.0%-0.6%-0.7%-0.9%-0.9%-40%-5.0%-2.8%--5.0%PAYOFOURTOSTESMTAVDXRELYPAYNVEIBILLGLBEFLYWWUPARRSKDYOYRevenueGrowth,3Q22E82%68%50%41%41%37%36%35%25%7%5%4%7%5%4%3%-16%October3_2024_2024EV/GP2024EV/GP3Q22GSvsconsensusHOODCOINSINTB$mnCOINSIHOODNTBHOODCOINSINTBNetinterestincomeTotalRevenue9717%72165111%3929717%72165111%39235112%1411410%Cons8811091ConsDifference24%33%0%DifferenceNetinterestmarginExpenses6806357%39390%1,2561,2976806357%39390%1,2561,297-3%84830%Cons2.38%2.59%ConsDifference0.59%0.02%DifferenceTradingrevenuesPretaxincome-82-58%-61122%745-82-58%-61122%745829%5756%Cons491203ConsDifference7%7%DifferenceFeebasedrevenuesEPS0%$1.67$1.31270%$1.67$1.3127%Cons15893850ConsDifference23%-8%-25%1%DifferenceCOINcomparisonsreflects"netrevenue"forrevenue,COINandHOODuse"AdjEBITDA"forpretaxincome0%-10%-20%-30%-40%-50%-60%-70%-80%YTDStockPerformance(until10/3/22close)-8%-30%-37%-45%-43%-43%-45%-74%-72-74%20%10%0%-10%-20%-30%-40%-50%Performancesincelastclosebefore2Q22earnings16%2%2%-1%-1%-2%-2%-3%-8%-8%-9%-20%-25%-25%-32%-34%-45%14.0x12.0x10.0x8.0x6.0xWU4.0WU2.0x0%0.0x-5%0%2024EEV/GPvs22-24RevenueCAGRGLBEFISVFIS5%PARGPNAVDXGPNESMTFLYWFOURPAYRELYBILLTOSTNVEIPAYO35%40%45%50%RSKD10%15%20%25%30%22-24RevenueCAGR14x12x10x8x6x4x2x0x0%2024EV/GPvs2024Ruleof40GLBEBILLFISVESMTFISVPARFLYWPARFISTOSTFISGPNFOURGPNAVDXPAYWUNVEIWUPAYORELY10%20%30%40%50%60%70%2024Ruleof40October4__Recentmovesinforeignexchangemarketshavecausedconsiderableimpactstorevenuesgeneratedoverseas.Withinourcoverage,webelievethelarge-capacquirers(FIS,FISV,andGPN),networks(VandMA),remittanceproviders(WUandRELY),andsmallercappaymentsnames(NVEI,GLBE,andFLYW)aremostexposedtoforeignexchangerisksduetothegeographyoftheircustomersandoperations.Giventhevolatileswingsinratesoverthepastfewmonths,inExhibit11weexaminedthepotentialimpactsfromFXonmgmt-providedFY22guidance.Wefirstexaminedthegeographicalrevenueexposureforthenamesmentionedabove,creatingaweightedFXimpactfollowingthetimingofthemostrecentearnings.WethenestimatedthepotentialFXoffsets/benefitsintheexpensebasetowalkouranalysisdowntocompanyprovidedEBITDAandEPSimpacts.It’simportanttonote,however,thatalthoughgeographicalrevenuedisclosureisrelativelyconsistentacrossnames,weevaluatedeachcompany’sgeographicalexpenseexposureonanamebynamebasis(leveragingmgmtcommentarywithourbasecaseexpenseexposureequaltorevenue).Puttingitalltogether,weviewFLYWandGLBEasmostexposedtotherecentFXmoves(revenue/EBITDA),particularlygiventheirsignificantU.K.exposure,whichhasshownsomeofthelargestdeteriorationversustheUSD.InternationalRevenueExposureFXRates%change(indexInternationalRevenueExposureGBPUSDKUSDZARUSDADUSDJPYUSDDGBPUSDKUSDZARUSDADUSDJPYUSDD9%4%1%7%0%46%%%26%7%0%46%%%26%23%%2%4%6%8%-10%-12%-14%KDPNGLBEIYKDPNGLBEIYWVWU*asofmostrecentdisclosuresOctober5_IntlRevenueExposureYO-3.5%-3.0%-2.5%-2.0%-1.5%-1.0%69%3,089-2.4%4,462.6%4,3903,642.7%3,5819.47-_IntlRevenueExposureYO-3.5%-3.0%-2.5%-2.0%-1.5%-1.0%69%3,089-2.4%4,462.6%4,3903,642.7%3,5819.47-0.76%9.397.10-1.25%7.01-2.1%10.3419%-3.2%1.80-1.45%1.77-2.7%6.50-0.50%6.47-0.8%7.0504%6.987.4757%7.35-3.0%2.8%-4.0%-0.8%-2.6%-2.2%FXImpactto2022GuidanceAvgSMID38%183-4.2%497-1.7%49044AvgSMID38%183-4.2%497-1.7%490440-2.0%43157.584%58.32AvgLCap43%7,095-2.9%16,009-1.1%15,8288,207-1.1%8,122PAYO15%88-3.9%585-0.6%582553-2.4%53932.5031%42.54FIS30%4,398-3.2%14,65814,5169,610-0.9%9,521FISV14%2,453-3.9%17,524-0.5%17,428-0.5%12,082RSKD30%77-3.6%257254312309-55.501%-54.93GPN23%1,900-2.9%8,300-0.7%8,2455,009-0.7%4,976GLBE61%254-5.5%416-3.3%402373-3.6%35943.5043.24$mnunlessnotedotherwiseMA64%14,24322,094-2.0%21,6589,5329,361V57%16,48929,01728,7329,3119,214FLYW50%131-4.8%265-2.4%258250-2.2%24415.00-5%14.20NVEI46%384-3.6%835821493484342.50-2%3RELY26%162-3.5%628-0.9%622660-0.9%654-32.501%-32.24IntlRevenueRevenueExpensesEBITDAEPSIntl.RevExposureIntl.RevIntl.RevFX%ImpactGuidanceIncrementalFXGuideadjforFXImpliedGuidanceIncrementalFXGuideadjforFXGuidanceIncrementalFXGuideadjforFXGuidanceIncrementalFXGuideadjforFXEst'23RevenueHeadwind*VprovidesFYguidance,andthusimpactisononlyonequarterofguidance,mayexcludeimpactsfromintraquarterhedgingactivities,estimatesforcostpassthroughIncremental2022FXRevenueGuidanceImpacts0.0%WU.0%WUVVLBELBEWWEIAvgLCapAvgSMIDRSKDFIS40.0%0.0%20.0%NV-0.5%0.0%0.0%RevenueImpact*VprovidesFYguidance,andthusRevenueImpact*VprovidesFYguidance,andthusimpactisononequarterofguidance*Vonly4QFYIncremental2022FXEPSGuidanceImpacts0.0%-0.5%-0.5%-0.8%--0.8%1.0%-1.5%-1.6%-2.0%-2.2%-2.5%PNVPNVWU*VproviesFYguidance,andthusimpactisononequarterofguidance0.0%-0.5%-2.0%-2.5%-3.0%-3.5%-4.0%-4.5%CY2023FXRevenueHeadwinds-0.8%-0.8%-1.2%-3.0%-2.8%-2.7%-2.6%-3.2%-4.0%GLBEMAVFLYWWUNVEIRSKDFISGPNRELYPAYOFISVOctober6__V:WearepositiveonVheadingintothequarter,aswebelieveunderperformancerelativetothebroadermarketunderappreciatestheresilienceofthebusinessinpriormacrodownturnsandtailwindsrelatedtoelevatedFXvolatilityandinflationinthecurrentenvironment.Inaddition,operationalmetricsfromVisa’srecentintra-quarterupdateindicatedAugusttrendsweremostlyconsistentwithmanagementcommentaryF3Qresults,butwithamodestdecelerationinUSvolumeindexedto2019levels(yoygrowthwasflatvs.July)andUSe-commercespending(ex-travel)inparticular(down6pptsindexedto2019levelsinAugustvs.July),whichwethinkwerelargelyexpected.Whileweexpectfairlylimitedsurprisesintermsofthequarter,weacknowledgethehighdegreeofuncertaintyinthemarket,leadinginvestorstoquestionwhetherVwillgiveafull-yearguideforFY23.Overall,webelievesentimentisabitchallengedrightnow,withthestockunderperformingin3Q(-10%vsS&P-5%)andwithStreetnumberslikelyneedingtoabsorbincrementalFXheadwinds,therecoveryincrossborderlikelydependentontherelaxationofCOVIDrestrictionsinChinaandJapan,andtheU.S.inboundcorridorreturningtofullstrength(unlikelyinneartermgivenstrongdollar),andcurrencyvolatilityremainingelevatedandlikelyasourceofdownsideifthevolatilityenvironmenteases,webelieveinvestorsarestrugglingwithalackofupsidecatalystsinthenearterm.However,withsharestradingat24xCY2023EEPSandEPSgrowthlikelytoremaininthedoubledigits,wenowseethisasanexcellententrypointforlongertermshareholderstolegintoadouble-digitcompounderbelowhistoricalvaluationlevels.Weupdateour12-monthpricetargetforVto$267(from$283)basedona29xQ5-Q8P/Emultipleonourupdatedestimates(30xpreviously,aswemarktomarketforchangesinpeermultiples).MA:WeexpectMAtobefairlyresilientinthecurrentenvironment,althoughwedoexpectsomeslightdifferentialimpactonnumbersversusVasaresultofthehigherinternationalskewtothebusinessandgreaterheadwindsfromFX.Inourupdatedestimates,weexpecttheincrementalFXonrevenuesimpacttobeabout~7.5%for3Q22and~3.4%impactfor2023.However,webelievetheelevatedcurrencyvolatilityshouldhelptooffsetthistosomedegreeinthenearterm.Thecardnetworkshavealsocommentedontherelativehealthofconsumerspending,whichhasbeenapointofinvestorconcernmorebroadly.Weupdateour12-monthpricetargetforMAto$425(from$465)basedona32xQ5-Q8P/Emultipleonourupdatedestimates(33xpreviously,aswemarktomarketforchangesinpeermultiples).October7_Jan-21Feb-21Mar-21Apr-21May-21_Jan-21Feb-21Mar-21Apr-21May-21Jun-21Jul-21Aug-21Sep-21Oct-21Nov-21Dec-21Jan-22Feb-22Mar-22Apr-22May-22Jun-22Jul-22Aug-22Jan-20Feb-20Mar-20Apr-20May-20Jun-20Jul-20Aug-20Sep-20Oct-20Nov-20Dec-20Jan-21Feb-21Mar-21Apr-21May-21Jun-21Jul-21Aug-21Sep-21Oct-21Nov-21Dec-21Jan-22Feb-22Mar-22Apr-22May-22Jun-22Jul-22Aug-222Q2212%21%4%48%40%12Q2212%21%4%48%40%16%14%12%8%128%26%5%Apr-2213%26%4%47%41%18%14%13%9%124%27%7%May-2212%21%4%45%36%17%14%10%6%139%19% Jun-2211%17%4%52%43%13%14%13%10%122%32%10%Aug-2211%17%7%51%36%12%11%13%9%98%30%10%Jul-2211%16%6%58%45%13%11%11%9%110%32%12%Cons.C3Q226%C3Q22Implied11%53%39%9%102%31%Sep-22E11%17%7%51%36%12%11%13%9%98%30%10%TotalUSVolumeUSCreditUSDebitXBVolumeexIntraEuropeXBTotalVolumeProcessedTxnsUSCardPresentUSCardNotPresentUSCardNotPresentexTravelCrossBorderCP+CNPTravel(XBTravel)CrossBorderCNPCrossBorderCNPexTravel(XBeCom)May-22145%135%154%127%May-22145%135%154%127%136%140%128%159%166%108%140%159%2Q22146%138%155%124%133%139%127%164%171%104%142%162%Apr-22148%140%157%117%128%138%125%169%177%92%141%166%Aug-22144%136%154%129%134%140%127%160%165%115%142%156%Jun-22146%140%154%128%136%139%127%163%170%112%144%161%Jul-22147%138%157%128%134%140%128%164%171%115%142%157%Sep-22E144%136%154%129%134%140%127%160%165%115%142%156%C3Q22Implied145%137%155%129%134%140%127%161%167%115%142%156%Cons.C3Q22145%137%152%TotalUSVolumeUSCreditUSDebit140%XBVolumeexIntra140%XBTotalVolumeProcessedTxnsUSCardPresentUSCardNotPresentUSCardNotPresentexTravelCrossBorderCP+CNPTravel(XBTravel)CrossBorderCNPCrossBorderCNPexTravel(XBeCom)h180%Visavs20191180%Visavs2019160%140%120%100%80%160%140%120%100%80%60%40%20%0%60%CrossBorderCP+CNPTravelVolume(XBTravel)CrossBorderCNPVolumeCrossBorderCNPexTravelVolume(XBe-Comm)CrossCrossBorderCNPexTravelVolume(XBe-Comm)October8_Jan-20Feb-20Mar-20_Jan-20Feb-20Mar-20Apr-20May-20Jun-20Jul-20Aug-20Sep-20Oct-20Nov-20Dec-20Jan-21Feb-21Mar-21Apr-21May-21Jun-21Jul-21Aug-21Sep-21Oct-21Nov-21Dec-21Jan-22Feb-22Mar-22Apr-22May-22Jun-22Jul-22Aug-22160%140%120%100%80%60%Visavs2019ProcessedTransactions160%150%140%130%120%110%100%90%80%70%60%Visavs2019JanJan-20Feb-20Mar-20Apr-20May-20Jun-20Jul-20Aug-20Sep-20Oct-20Nov-20Dec-20Jan-21Feb-21Mar-21Apr-21May-21Jun-21Jul-21Aug-21Sep-21Oct-21Nov-21Dec-21USPaymentsVolumeUSCreditVolumeJan-22FebJan-22Feb-22Mar-22Apr-22May-22Jun-22Jul-22Aug-22USDebitVolumeX.2386420%Exposure8%Exposure8.8%2.5%3.5%1.8%UK$987$$987$164PaymentVolume($,bns)VisaMastercardCardsOutstanding(mns)VisaMastercard$6,533492,68050.0xNetworksNTMP/50.0x40.0x30.0x24.9x23.5x23.9x21.123.9x21.1xDec-11MayDec-11May-12Oct-12Mar-13MAAugAug-13Jan-14Jun-14Nov-14Apr-15Sep-15Feb-16Jul-16Dec-16May-17Oct-17Mar-18VMAPre-COVIDAugAug-18Jan-19Jun-19Nov-19avgApr-20Apr-20Sep-20Feb-21Jul-21Dec-21May-22VPre-COVIDavgDec-11Dec-113.5x3.0x2.5x2.0x1.5x1.0xV/MAvs.S&P500RelativeNTMP/E2.2x2.0x1.8x2.11.8xAug-13Jan-14JunAug-13Jan-14Jun-14Oct-12Mar-13NovNov-14Apr-15Sep-15Feb-16VMay-17Oct-1May-17Oct-17Mar-18Dec-16AugAug-18Jan-19avgNov-19Apr-Nov-19Apr-20Sep-20Feb-21Jul-21Dec-21May-22MAPre-COVIDVPre-COVIDavgMAOctober9__hnFIS:Wearesomewhatcautiousintotheprint,aswebelieveFISislikelytoseesomemacro-drivenweaknessfromitsexposuretoregionssuchastheUKaswellasthehigherinterestrateenvironment.Howevergiventhevaluationandinvestornegativityaroundfundamentals,wedothinkthebarisrelativelylowhereandwouldnotexpectmeaningfulunderperformanceonUK,FX,andinterestratedrivenheadwinds.Additionally,aswenotedinourrecenttakeawaysnote,webelievemanagementcommentaryaroundtransitioningtomoreattainableandtransparentguidancecouldrequirearesetinexpectations.Inthenearterm,weexpectthefocustobeon1)aligning2023interestexpenseexpectationstoa$600mn+number,2)temperingexpectationsfor2023buybackstothe~$5bnrangeand3)pointingtowardshighercoreD&Aexpenseinthe8.5%ofrevenuerange.Beyondsomeofthesenear-termdynamics,webelievemanagementcouldlooktore-evaluateitslongtermtargets(seedeepdivebelow)fortoplinegrowthandmarginexpansioninthecomingquartersasthecompanybringsinanewsetofeyesintotheCFOseatandwithStreetexpectationstowardsthelowerendofitscurrenttargets.Inparticular,webelievethemarketisskepticalon1)thecompany’sabilitytodeliveronHSDgrowthinbankingrevenuesgivencurrentresultsarebenefitingfrominflationandelevatedtechnologydemandfrombanksinthewakeofthepandemicand2)theabilitytokeeppacewiththebroadermarketinmerchant,wherethecompany’shasunderperformedpeersandthemarket,andhasincreasinglypointedtowardssharelossdynamicsinitsSMBbusiness.Weupdateour12-monthpricetargetforFISto$114(from$110)basedona~15xQ5-Q8P/Emultipleonourupdatedestimates(~14xpreviously,aswealignmultipleswithpeers).October10BarclayBarclayCardSpendGrowthYoY_19%20%18%18%16%16%14%12%10%8%6%4%2%0%International(UK)EnterpriseGrowthBarclaycardOverallSpendGrowthYoY17.7%18.1%EnterpriseandOverallMerchantGrowth17%17%14%12%10%8%6%4%2%0%USEnterpriseGrowth3Q214Q2116.0%14.2%7.7%6.2%MerchantGrowth12.2%13.7%15.4%13.3%4.7%9.3%7.4%20%14%14%9%October11__Giventhefocusonthecompany’slong-termtargetsandperformance,wehaveincludedadeeperdiveintoFIS’sbusinesstounderstandgrowthandmargindynamicsatthesegmentlevelandtheramificationsforoverallvaluation.Basedonouranalysis,wecontinuetoviewcurrentvaluationashighlyattractive,evenwithaslightlylowergrowthrate,asourbottomupanalysissuggeststhecompanyshoulddeliver~7%top-linegrowthandmarginexpansioninthe~50bpsrange.ThisshouldleadtoEPSgrowthremaininginthedoubledigits,whichwebelieveshouldsupportahighermultiplethanthecurrent10.6xour2023EPSestimate.ThisisfurthersupportedbyaSOTPframework,whichpointstowards38%upsidetothecurrentshareprice.Thus,weremainBuyratedandcontinuetoexpectsolidbottomlinegrowthandfreecashflow.Ifthecompanycanre-positionitsoutlooktowardsmoreachievableexpectations,webelievethevaluationgapversusFISVshouldnarrowandleadtosharesoutperforming.Merchant:Ourbottomupbuildpointstovolumegrowthof~7%,revenuegrowthof~8-9%,withmarginexpansionof~50-60bps.Banking:Ourbottomupbuildshowsrevenuegrowthof~5%,withmarginexpansionbetween~5-20bps.CapitalMarkets:Ourbottomupbuildshowsrevenuegrowthof~7-8%withmarginexpansionaround~80-90bps.Allinall,thisimplies~7%top-linegrowthand~50bpsofmarginexpansiongoingforward.Tobetterunderstanddriversofgrowthinthemerchantsegmentwebuiltabottom-upforecastofvolumebysegment,withapproximatetakerates.Ourbottomupbuildimpliesgrowthof~8-9%forthemerchantsegment,whichcomparesto9%/10%growthonaverageover2023-2025forcomparablesegmentsatFISV/GPN(usingVisibleAlphaconsensus).Weseeabove-marketgrowthine-commerceasadriverofhighsingledigitrevenuegrowthfortheoverallsegment,withslowergrowthinthelowyieldenterprisesegmentcontributingtoslightlyhighertakeratesfrommixshift.However,ourestimatesdoshowFISslightlyunderperformingnetworkvolumesintotheout-years.Forourgrowthassumptions,webasedthee-commercesub-segmentonmanagementcommentaryaboutgrowthslightlyfasterthanmarketgrowthfore-commerce,whichisinthemidteens.WeassumedGDP-likegrowthinenterprisegivenfairlylongtermcontractswithlarge,maturebusinessesindiversifiedendmarkets.WeuselowergrowthassumptionsforSMBgivenmanagementcommentaryoncompetitivenessinthespaceaswellassharelosses.October12__OurtakerateassumptionsarebasedonmanagementcommentaryforhigheryieldsintheSMBsub-segment(~60-70bpsballparkrange),whileenterpriseyieldisbasedonsingledigitcentspertransaction,withassumedtransactionsizebetween~$30-$50.Lastly,managementhascommentedthate-commerceyieldsarebetweenSMBandenterprise,andwebelievearebolsteredbyhighertakeratesinthecompany’sexposuretoairlines.Weback-testedfromtheseassumedtakerates