Pursuant to yesterday’s note, in which the broker reiterated its Sell rating for Afterpay Touch based on a perceived high credit risk for the BNPL sector, and higher still for Afterpay individually, the broker has increased its sales forecasts following yesterday’s update from management. Both the US and UK customer bases are tracking at a higher rate than anticipated, highlighting, the broker suggests, strong execution.
But this does not detract from a valuation call based on said risk rather than discounted cash flow methodology. Sell and $17.60 target retained.
Sector: Software & Services.
Target price is $17.60.Current Price is $29.17. Difference: ($11.57) – (brackets indicate current price is over target). If APT meets the UBS target it will return approximately -66% (excluding dividends, fees and charges – negative figures indicate an expected loss).