Morgans initiates coverage of Australia’s fifth largest merchant acquiring bank, Tyro Payments, with an Add rating and a target price of $4.25.
The company is technology-driven and offers payment solutions (debit/credit card acquiring) and complementary business banking products in Australia.
The total transaction value acquired (TVA) in Australia of 660bn as at FY20 included $171bn in the company’s core verticals of Health, Hospitality and Retail.
The company increased its TVA market share between FY15 and 1H21 to 3.5% from 1.4% and has consistently shown improving operating leverage over time.
Sector: Software & Services.
Target price is $4.25.Current Price is $3.60. Difference: $0.65 – (brackets indicate current price is over target). If TYR meets the Morgans target it will return approximately 15% (excluding dividends, fees and charges – negative figures indicate an expected loss).
