HSBC Global Research has identified the global payments company Wise as “fintech’s latest gem” and suggested that its share price could rise as high as 900p. Wise was trading on the London Stock Exchange at 741.40 at time of writing.
HSBC appears to be bullish on Wise as a result of what it calls the company’s “unique infrastructure [that] supports strong value proposition and high barrier to entry.” The global bank says that “its product suite, powered by a proprietary core engine of advanced payments technologies, strong licence networks and partnerships, creates a unique value proposition of a low-cost and seamless customer experience.” This could in turn help drive the share price higher.
The bank’s research note on Wise also outlines the company’s strong growth avenues which could help drive higher profits – and a higher share price. The global cross-border payments market is projected by HSBC to grow by 5% per year until 2027, while they also expect Wise to achieve broader coverage.
“Management estimates it has just scratched the surface in terms of penetration, with c. 5% market share in individuals and <1% in business,” HSBC writes. Could Wise be set to service a larger proportion of a larger pie?
There are risks to which Wise is exposed, of course, with HSBC noting the potential of “longer-lasting falls in volume per customer due to a difficult macro environment,” as well as “faster net interest income decline.” However, with Wise’s fundamentals judged to be sound, HSBC expects the fintech company to be able to ride out short-term uncertainty.
Wise has performed strongly on the LSE this year so far, with its share price strengthening by over 33% in the year to date, although the price remains substantially below the all-time highs achieved during the 2021 tech boom.
Author: Harry Clynch
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