UBS analysts are mostly bullish on the digital payments segment, initiating coverage of stocks in the sector with three buy ratings and one neutral rating.
The firm has buy ratings on Square (SQ) - Get Report , Global Payments (GPN) - Get Report and Fiserv (FISV) - Get Report . Those companies are expected to have "reaccelerating revenue growth and/or improving adjusted EBITDA and operating margins to drive multiple expansion, consistent with the historical relationship between margin and P/E," according to UBS analyst Eric Wasserstrom.
For Square specifically, Wasserstrom sees 2020 as being a "transitional year of investment" which will lead to an improved performance in 2021 and beyond.
Shares of Square were rising 2.83% to $63.58, Global Payments gained 0.45% to $164.89 and Fiserv was up 0.9% to $106.97. Fidelity National declined slightly to $132.60.