Analyst Downgrades Fidelity National Services
A Goldman Sachs analyst downgraded Fidelity National Information Services Inc. Thursday after the company spun off its lender-processing unit, saying Fidelity has limited growth potential.
Late Wednesday, the Jacksonville, Fla., company said it completed the spinoff of Lender Processing Services Inc. Julio Quinteros Jr. said Fidelity's exposure to banks will impair growth, because he thinks the banking industry will continue to weaken through the end of 2009, and he downgraded the stock to "Neutral" from "Buy" and lowered his six-month price target to $25 per share from $45.
Fidelity National provides technology services to financial institutions.
The Lender Processing spinoff gave Fidelity shareholders one share of Lender Processing stock for every two Fidelity shares owned. LPS shares began trading on June 24 at $30 per share, and closed at $33 Wednesday.
Fidelity National shares rose 4 cents to $20.79 in morning trading Thursday.
Quinteros also trimmed his estimates on information technology provider Fiserv Inc., and cut his price target to $51 per share from $56.
Calls seeking comment from Fidelity were not immediately returned.