:max_bytes(150000):strip_icc()/GettyImages-1855024005-5927748261f8450f88bf10438279e3dd.jpg "Shopify Stock Climbs After Bank of America Analysts Say It’s ‘Turning a Corner’")
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Key Takeaways
- Bank of America upgraded shares of Shopify, saying the online payments platform is turning a corner on balancing growth and profit margins.
- The bank boosted its rating from neutral to buy and increased its price target by $4 to $82.
- The stock is rising today, though still in the red for 2024.
Shopify (SHOP) shares rose Tuesday after an upgrade from Bank of America, which argued that the online payments platform is “turning the corner.”
Bank of America raised its rating to buy from neutral, and increased its price target from $78 to $82. The shares, recently up 7%, are still down for the year. They closed Monday a bit above $64.
The bank’s analysts said that under CFO Jeff Hoffmeister, after years of declining profit margin the company is now better balancing profitability and growth. In their note, they wrote that they see solid revenue increases and free cash flow conversion, fueled by high single-digit percent baseline e-commerce growth, steady share gains, and disciplined spending.
Shopify “is likely to continue to consolidate the vast small business market of 5.2 million businesses in the US alone,” the analysts wrote.
The company earlier this year offered full-year revenue guidance that disappointed investors. In June it announced a partnership to help retailer Target (TGT) boost its online sales.
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