Benzinga -
- KeyBanc analyst Josh Beck reiterated an Overweight rating on the shares of Shopify Inc. (NYSE: SHOP), increasing the price target to $65 from $55.
- The recently-inked Flexport deal is likely to sharpen the core focus and boost merchant fulfillment options of Shopify, the analyst notes. The agreement includes the sale of Shopify's core logistics assets - Deliverr.
- Management announced Shopify would sell Deliverr to Flexport in return for a ~13% equity stake and merchant referral fees. The company expects the acquisition to close in 2Q23.
- This apart, the analyst believes Shopify's cloud-based, mobile-centric platform is well-positioned to capitalize on the m-com wave, given an impressive innovation velocity and vibrant partner ecosystem.
- The company is expected to benefit from increased payment penetration increases in non-core geographies, which is likely to propel Merchant Solutions revenue growth, Josh notes.
- For 2023 KeyBanc raised Shopify's EBIT to $305 million vs. an earlier forecast of a loss of $70 million.
- For 2024, EBIT is expected to be $450 million, vs. an earlier estimation of a $79 million loss.
- The analyst expects gross merchandise volume to be $53.5 billion (up HSD q/q, similar to last year's seasonality).
- Price Action: SHOP shares traded higher by 7.66% at $61.69 on the last check Monday.
| Feb 2022 | Morgan Stanley | Maintains | Equal-Weight | |
| Feb 2022 | Credit Suisse | Maintains | Neutral | |
| Feb 2022 | Mizuho | Maintains | Neutral |
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