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Benzinga
Benzinga
Business
Anusuya Lahiri

Here's How Wells Fargo Views Fintech Stocks Shopify, PayPal, Block

  • Wells Fargo analyst Jeff Cantwell launched global coverage of the payments and fintech sector with a bullish stance. 
  • He saw a $1.5 trillion annual revenue opportunity for fintech companies globally and expects 6% yearly growth over the ensuing decade. 
  • Cantwell initiated Shopify Inc (NYSE:SHOPwith an Overweight rating and an $834 price target (18.2% upside).
  • After the recent pullback, he views the valuation as "more palatable" for Shopify, which he thinks should grow GMV rapidly in FY22 and FY23 with concurrently strong revenue growth. 
  • The ongoing launches of value-added products and services highlight a crucial theme, vendor consolidation, that he expects to drive sustained share gains.
  • Cantwell initiated PayPal Holdings Inc (NASDAQ:PYPLwith an Overweight rating and a $152 price target (27.9% upside). 
  • PayPal is the payments leader currently trading at a "reasonable multiple post-reset." 
  • The stock's reset is overdone as the company has "operating tailwinds" across its platforms, producing strong growth after eBay's lapping, driving shares higher.
  • Cantwell initiated Block Inc (NYSE:SQwith an Overweight rating and a $165 price target (19.7% upside). 
  • He saw Block gain a share in its Square and Cash App businesses, with the upcoming investor day in May as a potential catalyst. 
  • He is also interested in Block's long-term crypto aspirations.
  • Price Action: SHOP shares traded lower by 3.72% at $700.25 on the last check Tuesday.
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