Fidelity National Information's Share Performance Faltering Slightly Since Q2 Release

While noting that Fidelity National Information Servcs Inc's (NYSE: FIS) shares have underperformed the broader market since the release of its Q2 results in July, Barclays said it sees this as an opportunity to add to positions. The positive view stems from the findings from its checks and analysis that trends across the business remain sound.

Anaylst Darrin Peller noted that shares trade at only 17 times its 2017 earnings per share, three turns below Fiserv Inc(NASDAQ: FISV). Additionally, the analyst noted the firm's new screen of 1,500 stocks possessing similar characteristics as Fidelity National show a median multiple of 18 to 19 times.

The analyst believes the valuation would rise by at least two turns with the 4-5 percent organic revenue growth the company is guiding to. Operating leverage, SunGard synergies and buybacks, according to Barclays, could lead to notable upside to 2017 and 2018 earnings per share estimate.

Top Pick

Barclays said it's maintaining Fidelity National as its top pick. The firm also introduced its 2018 earnings per share estimate of $5.05. Accordingly, the firm raised its price target on shares to $96 from $88.

At time of writing, shares of Fidelity National were down 0.10 percent at $77.