After a few wobbles this week, the Afterpay Ltd (ASX: APT) share price has found its feet and is charging higher on Thursday.
In afternoon trade the payments company’s shares are up almost 10% to $120.79.
This leaves the Afterpay share price trading within touching distance of its record high of $123.40.
Why is the Afterpay share price charging higher?
As well as getting a lift from improving sentiment in the buy now pay later sector today following Affirm’s successful listing in the United States last night, Afterpay’s shares appear to have been boosted by a bullish broker note released this morning.
According to a note out of Morgan Stanley, its analysts have retained their overweight rating and lifted their price target on the company’s shares by 13% to $136.00.
Even after today’s strong gain, this price target implies potential upside of over 10% for its shares.
Why is Morgan Stanley bullish on Afterpay?
The broker has been looking into app downloads and notes that the Afterpay app has been experiencing significant demand in the United States and United Kingdom markets.
In light of this, Morgan Stanley is forecasting that the company will report active customers of approximately 13.6 million for the first half of FY 2021. This represents a 37.4% increase from 9.9 million active customers at the end of FY 2020.
And with Afterpay reporting 11.2 million active customers at the end of the first quarter, this will be a 21.4% increase in just the last three months.
As a result of this potentially stronger than expected customer growth, Morgan Stanley has increased its revenue forecasts accordingly.
Pleasingly, the broker doesn’t expect Afterpay’s strong revenue growth to end any time soon. Thanks to growth in existing markets and its expansion into new ones, Morgan Stanley believes Afterpay is well-placed to deliver a compound annual growth rate (CAGR) of over 60% over the next three years.
This Tiny ASX Stock Could Be the Next Afterpay
One little-known Australian IPO has doubled in value since January, and renowned Australian Moonshot stock picker Anirban Mahanti sees a potential millionaire-maker in waiting…
Because ‘Doc’ Mahanti believes this fast-growing company has all the hallmarks of genuine Moonshot potential, forget ‘buy now pay later’, this stock could be the next hot stock on the ASX.
Doc and his team have published a detailed report on this tiny ASX stock. Find out how you can access what could be the NEXT Afterpay today!
See how you can find out the name of this stock
Returns as of 6th October 2020
More reading
- Could this be why Afterpay (ASX:APT) and other BNPL shares are soaring today?
- ASX 200 up 0.3%: Afterpay surges, Pro Medicus rockets on $40m contract, Whitehaven rises
- Why Afterpay, Australian Ethical, Pro Medicus, & Sezzle shares are charging higher
- 4 ways to lose all your money
- 5 things to watch on the ASX 200 on Thursday
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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 Afterpay (ASX:APT) share price jumps 10% on bullish broker note appeared first on The Motley Fool Australia.
from The Motley Fool Australia https://ift.tt/3i9O3Fy
Leave a Reply