Banking & Finance

9 Undervalued Financial and Fintech Stocks From Goldman Sachs Conviction Buy List

Citizens Financial Group Inc. (NYSE: CFG), unlike its larger rivals, depends on lending and mortgage banking fees to generate revenues and profits. The bank has set aside $464 million as a provision against credit losses. Goldman’s price target on the stock is $32.

Citizen Financial’s shares closed at $25.59 on Friday, in a 52-week range of $14.12 to $41.29. The consensus price target is $29.67. That implies a potential upside of almost 16% for the stock, currently trading about 38% below its 52-week high. Shares trade at about 11.5 times expected 2021 earnings and pay a dividend yield of 5.99%.

Fiserv Inc. (NASDAQ: FISV) is a financial services company that does business in two segments. The First Data segment offers a range of business services and the payments and industry products segment focuses on billing and payment services. The company is expected to report second-quarter earnings per share (EPS) of $0.93 and revenue of $3.32 billion on August 5. Goldman has a $125 price target on the company’s stock.

Fiserv’s stock closed at $100.63 on Friday, and it has a 52-week range of $73.50 to $125.05. The consensus price target is $122.45, implying a potential upside of more than 21% for the stock. It currently trades about 19.5% below its 52-week high and at nearly 23 times expected 2021 earnings. Fiserv does not pay a dividend. Its shares have gained about 6% in the past 12 months.

IntercontinentalExchange Inc. (NYSE: ICE) offers central clearing services for the futures and over-the-counter markets. Its primary products include agriculture, financial and energy contracts, as well as credit default swaps. The company recently completed its acquisition of the NYSE Euronext exchange. ICE is scheduled to report second-quarter EPS next week of $1.04 and revenue of $1.39 billion. Goldman has a price target of $110 on the stock.

IntercontinentalExchange’s stock closed at $96.38 on Friday, in a 52-week range of $63.51 to $101.93. The consensus price target is $105.88, implying a potential upside of nearly 10% for the stock, currently trading about 5.4% below its 52-week high. Shares trade at about 23 times expected 2021 earnings. ICE pays a dividend yield of 1.25%.

Mastercard Inc. (NYSE: MA) is the country’s second-largest credit card issuer with a market cap of more than $308 billion. The company is scheduled to report second-quarter results next week. Analysts expect EPS of $1.17 and revenue totaling $3.25 billion. Goldman’s price target on the stock is $364.

Mastercard shares closed Friday at $307.03, with a 52-week range of $199.99 to $347.25. The $330.38 consensus price target implies a potential upside of 7.6% for the stock, which currently trades about 11.6% below its 52-week high. Shares trade at nearly 38 times expected 2021 earnings. The company pays a dividend yield of 0.52%.

PayPal Holdings Inc. (NASDAQ: PYPL) is, perhaps, the best known of the digital payments companies and probably less well known as the platform upon which the popular Venmo app is built. Both Mastercard and Visa have spent billions to acquire firms that offer platforms to compete with PayPal. When the company reports results next week, analysts are expecting to see EPS of $0.88 and revenue of $4.98 billion. Goldman has a price target of $205 on the stock.

Paypal’s stock closed at $172.56 on Friday in a 52-week range of $82.07 to $183.99. The consensus price target is $183.28, implying a potential upside of 6.2% for the stock. It is currently trading at about 6% below its 52-week high. Shares also trade at nearly 44 times expected 2021 earnings. The company does not pay a dividend.

Regions Financial Corp. (NYSE: RF) recently announced a surprise quarterly loss of $0.23 a share, even though the bank posted higher than expected revenue of $1.54 billion. The bank added $700 million to its credit loss provision. Noninterest income rose 18% year over year and net interest income rose by 5%. Mortgage income drove revenue growth in the quarter, rising by 21%. Goldman has a price target of $13.50 on the stock

The stock closed at $10.91 on Friday in a 52-week range of $6.94 to $17.54. The $12.51 consensus price target implies a potential upside of 14.7%. The stock currently trades at about 38% below its 52-week high and at more than 10 times expected 2021 earnings. The bank’s dividend yield is 5.62%.