Afterpay has indicated there are now more than 5m active customers in the US. No update on other markets was provided. Given the impressive US customer growth, UBS assumes the credit system is working well and lowers the magnitude of expected bad debts for FY21.
While expecting the pandemic may accentuate the positive structural changes for Afterpay the broker is cautious about extrapolating recent growth in online, given the forced closure of many shops. Sell rating maintained. Target rises to $14 from $13.
Sector: Software & Services.
Target price is $14.00.Current Price is $44.51. Difference:
($30.51) – (brackets indicate current price is over target). If APT meets the UBS target it will return approximately -218% (excluding dividends, fees and charges – negative figures indicate an expected loss).
