SHOP stock surged higher on July 1, 2020, after a Buy rating from Argus.
SHOP stock is definitely an analyst favorite.
Argus analyst Jim Kelleher initiated coverage of Shopify with a Buy rating and $1,050 price target. Jim Kelleher is positive on the company’s position to offer merchant customers a “single view of multiple sales channels”, including web-based and mobile online platforms, physical retail locations, social media storefronts, marketplaces, and other venues. The stock has become a “core holding” for institutional investors amid mounting challenges in physical retail, as the pandemic has “highlighted the limits on limits on brick-and-mortar commerce and heightened the need for a multichannel go-to-market model”, Kelleher tells investors in a research note.
On June 29, 2020, Goldman Sachs analyst Christopher Merwin raised the firm’s price target on Shopify to $1,127 from $786 and kept a Neutral rating on the shares. In light of the current interest rate environment, the analyst adjusted assumptions in the discounted cash flow component of his valuation methodology, which drives increased price targets across the software sector. The “resiliency” of the sector throughout COVID-19 underscores the “criticality” of many software categories as businesses adjust for more distributed workforces and therefore require modernized cloud systems, Merwin tells investors in a research note. With sector multiples at all-time highs, the analyst favors stocks where he sees “compelling relative value.”
On June 24, 2020, KeyBanc analyst Josh Beck raised the firm’s price target on Shopify to $1,000 from $805 and kept an Overweight rating on the shares. His Key First Look Data supports that his Digital Acceleration thesis is maintaining momentum with May e-commerce growth accelerating by 20%-50% month-over-month despite an economic re-opening as multiples have expanded about 50% since March 1st. The analyst believes Shopify deserves an Overweight software position despite a perceived lofty valuation because he sees an increased probability of success across a number of initiatives.
On June 18, 2020, RBC Capital analyst Mark Mahaney raised the firm’s price target on Shopify to $1,000 from $825 and kept an Outperform rating on the shares. The company’s stock price has doubled year-to-date, but investors still undervalue its total addressable market, its take rate potential, and its operating margin, the analyst tells investors in a research note. Mahaney adds that consumer buying patterns have changed “permanently” in favor of e-commerce during COVID-19, which warrants Shopify’s premium multiple of enterprise value 28-times expected sales.