Goldman Sachs Upgrades Shift4 Payments (FOUR) to Buy

Goldman Sachs analyst Will Nance upgraded Shift4 Payments (NYSE: FOUR) from Neutral to Buy with a price target of $67.00 (from $48.00).

The analyst comments "We are upgrading shares of FOUR to Buy with a price target of $67, implying 25% upside. We believe FOUR is well positioned to continue to deliver strong growth rates into 2023 across several angles, including 1) its gateway conversion strategy 2) geographic expansion into new markets and 3) entry into various new verticals, including stadiums, hospitality charitable giving, and travel. With multiple levers for growth, we don’t believe FOUR needs to be successful in every one and believe execution across several of these initiatives should continue to support growth and help to offset potential macro weakness in its legacy verticals. In addition, we view current Street expectations for EBITDA as highly conservative, as we don’t believe the Street is baking in the impact of FOUR’s distribution insourcing which drove higher gross margins and pushed EBITDA margins into the low 40s% (vs 2023 Visible Alpha Consensus Data at 38%). Lastly, we see scale benefits, diversification away from its legacy restaurant vertical (or towards its Skytab platform within restaurants), and growth in new direct sales/hardware-light verticals should support improving free cash flow conversion over time."

For an analyst ratings summary and ratings history on Shift4 Payments click here. For more ratings news on Shift4 Payments click here.

Shares of Shift4 Payments closed at $55.05 yesterday.

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