On Tuesday the Afterpay Ltd (ASX: APT) share price dropped lower despite the release of an impressive third quarter update.
The payments company’s shares dropped almost 1% to $125.23.
What happened in the third quarter?
For the three months ended 31 March, Afterpay continued its strong form by reporting a 104% increase in underlying sales to $5.2 billion.
This comprises a 167% increase in North American sales to $2.6 billion, a 48% lift in ANZ sales to $2.1 billion, and a 246% jump in the UK sales to $0.5 billion.
This strong performance was driven by a 75% increase in active customers globally to 14.6 million and increasing customer frequency across all regions.
Also catching the eye was news that there may soon by an Afterpay share price trading on US markets. Afterpay notes that the US is now its biggest market and its shareholder base is increasingly becoming more globally focused. It feels a US listing would further accommodate this growing interest.
Where do brokers think the Afterpay share price is going?
Analysts at Credit Suisse were pleased with Afterpay’s sales growth during the quarter. And while its customer growth fell a touch short of expectations, the broker has retained its outperform rating and $145.00 price target.
The ultra bearish UBS has held firm with its sell rating and $36.00 price target on the company’s shares. They are concerned that its US listing could distract management, particularly given the requirement for more rigorous quarterly reporting.
Over at Morgans, its analysts have retained their hold rating and trimmed its price target slightly to $121.00.
Analysts at Wilsons have reduced their price target but remains positive on the company. Wilsons has a buy rating and $151.05 price target on Afterpay’s shares.
And yesterday, after a first look at its result, Macquarie Group Ltd (ASX: MQG) held firm with its neutral rating and $120.00 price target. It noted that Afterpay’s numbers were in line with its expectations.
Over at RBC Capital, yesterday its analysts noted that Afterpay fell a touch short of its expectations in the third quarter. However, it remains confident it can still achieve its full year forecasts. RBC had an outperform rating and $150.00 price target at that point.
Based on the above, brokers appear largely undecided on the direction the Afterpay share price is going from here.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
The post Leading brokers give their verdict on the Afterpay (ASX:APT) share price appeared first on The Motley Fool Australia.
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