UPDATE: Morgan Stanley Nearly Doubles Shift4 Payments (FOUR) PT to $86

Morgan Stanley analyst James Faucette raised the price target on Shift4 Payments (NYSE: FOUR) to $86.00 (from $46.00) after strong management execution enabled the company to (i) outperform peers throughout 2020, (ii) announce technology-driven acquisitions, and (iii) win new business both within the hospitality business and in new verticals that should support faster growth than peers through 2022.

The analyst reiterated the Equalweight rating, stating "We see their execution on M&A, in particular, as a differentiator vs. some of their merchant acquiring peers. Given the high level of FinTech investment over the past ~5 years, we view aggressive M&A (or very elevated levels of internal R&D) as a key success and value creation strategy for merchant acquirers—more so now than capital returns, or even overall margins/profitability. The Shift4 team has executed M&A well to get to its current scale, having acquired 3 companies since going public in June 2020. We expect that the company will continue to be aggressive looking for both technology and scale acquisition opportunities. However, given valuation, we remain EW on our typical 12-18 month recommendation view, but we believe that Shift4’s current size and strength of management gives the company enhanced longer-term prospects for growth (both organically and inorganically)."

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