Citi analysts have dug deeper into web site traffic and app downloads for the Buy Now, Pay Later sector in general. Their conclusion is that Afterpay Touch had a solid October in the USA.
In addition, Citi expects the recent launch of a number of marquee brands to result in strong merchant sales over the upcoming holiday period.
The analysts continue to see fierce competition as the key risk for the company, but given the recent share price retreat, and the above analysis, they have decided to upgrade to Buy from Neutral. Price target $31.10 (was $33.70).
Minor amendments have been made to forecasts.
Sector: Software & Services.
Target price is $31.10.Current Price is $28.24. Difference: $2.86 – (brackets indicate current price is over target). If APT meets the Citi target it will return approximately 9% (excluding dividends, fees and charges – negative figures indicate an expected loss).