UPDATE: SMBC Nikko Securities Starts Shift4 Payments (FOUR) at Neutral

January 26, 2022 4:11 PM EST
Get Alerts FOUR Hot Sheet
Price: $46.64 +4.50%

Rating Summary:
    9 Buy, 5 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 14 | Down: 24 | New: 13
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(Updated - January 26, 2022 4:12 PM EST)

SMBC Nikko Securities analyst Andrew Bauch initiates coverage on Shift4 Payments (NYSE: FOUR) with a Neutral rating and a price target of $60.00.

The analyst comments "

Since its 2020 IPO, Shift 4 has been one of the more debated names in the integrated point-of-sale space (“IPOS”). From the bull's perspective, investors see a compelling higher-than-typical GARP stock (+30% gross profit CAGR) and despite exposure to COVID-impacted verticals, admirable volume trends over the last several years. Detractors often question the Company’s ability to sustain said growth, particularly in the long-term given heightened competitive dynamics among IPOS companies, many of which have highly differentiated capabilities in FOUR’s core restaurant and hospitality verticals (FOUR services 1/3 of the restaurants and hotels in the U.S. and >250k merchants in total). In our view, Shift 4 has made impressive strides that investors should take notice of, notably (1) executing on its gateway conversion strategy (converting merchants from low yielding gateway processing to higher yielding full-stack), (2) supplementing growth with organic wins, ex-gateway, and (3) positioning the business for incremental growth opportunities in emerging verticals (charities, gaming and airlines, among others). While we appreciate management’s aspirations for a 50% end-to-end volume CAGR and 30% net revenue CAGR through 2024, we believe this algorithm is largely priced in. We can envision a gross profit CAGR near 40% in our bull scenario, however, we see limited room for outperformance beyond that. While it is possible that shares may outperform the S&P in a hypothetical cyclical upturn, we see greater alpha opportunities across other names in our coverage at this time and initiate Neutral on the shares."

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 $46.61 yesterday.


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