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Highlights:
- Jefferies sees Wise PLC as well-positioned despite economic challenges in the fintech sector.
- Wise’s multiproduct strategy and customer growth give it an edge over competitors facing headwinds.
- Jefferies maintains a 'buy' rating with a 986p price target ahead of Wise’s second-quarter results
Despite macroeconomic headwinds affecting Europe's financial technology and payments sectors, Wise PLC (LSE:WISE) is well-positioned to face these challenges, according to investment bank Jefferies. The analysts highlighted Wise’s "steady execution of customer growth" as a key advantage ahead of the company’s third-quarter earnings call later this month.
While inflation has eased, Jefferies noted that broader macroeconomic improvements have not materialised, leading to a cautious outlook for the second half of the year. The report also pointed out that recent profit warnings from major retail and auto sectors, including H&M, Burberry, and Volkswagen, coupled with a drop in UK consumer confidence, have added to the uncertainty.
Jefferies stated that many European payment companies are grappling with negative consensus revisions for 2024, but Wise’s status as a disruptive global player gives it a unique edge. Wise's multiproduct strategy allows it to monetise consumer activity efficiently, boosting confidence in its medium-term growth prospects.
Jefferies maintained a 'buy' rating on Wise, setting a price target of 986p, with the stock currently trading around 670p. Wise’s second-quarter results are expected on 15 October.
