Worldline Earnings: 2025 Guidance Disappoints; New CEO Announced

We lower our fair value estimate for Worldline to EUR 15.50 per share from EUR 22 after the payment services provider released disappointing revenue guidance for 2025. Worldline expects the slow growth, as it exited 2024, to roll into the first half of 2025, before it anticipates better performance. Revenue growth guidance for 2025 is expected to be equal to that of 2024 (0.5% on an organic basis). We also reduced our medium-term growth assumptions for the merchant services business. Worldline highlighted market share losses in Belgium, pointing toward product delivery issues, while painting a more robust picture in other core European markets. Volume growth of 3% paints a slightly better picture if we exclude hardware delivery problems in the fourth quarter. We maintain our narrow economic moat. Shares are deeply undervalued, but we stress our Very High Morningstar Uncertainty Rating to any investor looking for a bargain.