Fidelity National Information Services' (FIS) management attributed a decline in "banking growth" in Q4 to unexpected events and projected banking revenue growth to accelerate in Q2, BofA Securities said in a note Tuesday.

The analysts said the company's shares fell mainly due to disappointing banking growth in the last quarter. Management in the post-earnings call said this miss was caused by unexpected events late in the quarter. The 1% growth in recurring banking revenue for Q4 included a -1% contract adjustment, and the 3% decline in non-recurring banking revenue for Q4 was due to a "large" license deal that was delayed until 2025, and a $20 million reversal of a termination fee from a bank merger that was canceled because of regulatory issues.

BofA analysts said the company expects banking revenue growth to rise in Q2, aligning with its 2025 outlook of 3.7% to 4.4% growth. The growth in 2025 will be driven mainly by "strong" company sales and the Dragony acquisition. Non-recurring revenue will decline while recurring revenue is expected to grow slightly faster than the overall segment. The analysts also said that after the banking segment miss, investors are now paying closer attention to the company's free cash flow performance and the stock's free cash flow multiple.

"We believe downside in the stock is limited from here, with substantial upside potential pending successful quarterly execution," the analysts said.

BofA Securities cut its price target to $87 from $96 while keeping a buy rating on the stock.

FIS shares were 0.2% lower in recent trading.

Price: 73.02, Change: -0.14, Percent Change: -0.19