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Shift4 Payments (NYSE:FOUR) shares are upgraded to Overweight from Equal-Weight by Stephens analysts after shares fell 8.7% yesterday on the Blue Orca short report.
The selloff creates an attractive entry point, analysts said in a client note. They add that the risk/reward has improved considerably as multiple should be able to expand again.
“Despite the constructive view of mgmt/fundamentals outlined in our 4/13 initiation, we had previously concluded that: 1) the YTD advance in shares reflected comfort around the ’23 guide, 2) the macro risk associated w/ restaurant/hotels warranted a degree of caution,” the analysts said in a client note.
They highlight the upcoming earnings report and the closing of the Finaro transaction (expected in Q2) as upcoming catalysts that could help FOUR stock to re-rate higher.
“We view ’23/’24 est (notably the ’24 margin of 45%) as conservative in light of new vertical contribution to margin/vol,” analysts added.
The $80 per share price target offers a nearly 30% upside from current levels.
FOUR shares are still up 10.1% year-to-date.
