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DLX: Expanded Bank Partnership Will Drive Future Upside Despite Margin Headwinds

Digital Transformation Will Reshape Payment And Data Services

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DLX
AnalystConsensusTarget
Not Invested
Published 24 Sep 2024

Update shared on 21 Dec 2025

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Narrative Update on Deluxe

Analysts have modestly lifted their price target on Deluxe to align with a fair value estimate of approximately 28.67 dollars, citing a slightly lower perceived risk profile driven by a reduced discount rate, while maintaining stable long term growth and profitability expectations.

What's in the News

  • Deluxe completed its long running share repurchase program announced in October 2018. The company retired a total of 4.8 million shares, or about 10.8% of shares outstanding, for approximately 212.6 million dollars, although no shares were bought back in the most recent quarter (company filing).
  • Deluxe expanded its partnership with Peoples Bank to include integrated Merchant Services. This builds on earlier decisions by the bank to shift promotional and check business to Deluxe over the past year and highlights the traction of the One Deluxe cross selling strategy (company announcement).

Valuation Changes

  • Fair Value Estimate remains unchanged at approximately 28.67 dollars per share, indicating no revision to the intrinsic valuation.
  • The discount rate has fallen slightly from about 9.62 percent to 9.42 percent, reflecting a modestly lower perceived risk profile.
  • Revenue growth is essentially unchanged at roughly 0.81 percent, signaling stable expectations for top line expansion.
  • The net profit margin is effectively flat at around 3.39 percent, suggesting no material change in long term profitability assumptions.
  • The future P/E has edged down slightly from about 23.63 times to 23.50 times, indicating a marginally lower valuation multiple applied to forward earnings.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.