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Shopify, PayPal, Wix.com Are 'E-Commerce Enablers' In Digital Shift: KeyBanc

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Shopify, PayPal, Wix.com Are 'E-Commerce Enablers' In Digital Shift: KeyBanc

The ongoing digital acceleration has prompted an analyst at KeyBanc Capital Markets to adopt a positive stance on e-commerce and e-commerce-enabling companies such as Shopify Inc (NYSE: SHOP), Paypal Holdings Inc (NASDAQ: PYPL) and Wix.Com Ltd (NASDAQ: WIX).

The E-Commerce Ratings: Josh Beck maintained Overweight ratings on Shopify, Paypal and Wix.com.

The analyst upped the price target for Shopify from $1,000 to $1,125.

Beck hiked the price target for PayPal from $190 to $200.

The analyst also increased the price target for Wix.com from $275 to $325.

The E-Commerce Thesis: The momentum of digital acceleration is holding up, with sustained above-average growth in June, Beck said in a Tuesday note. (See his track record here.)

The June data, though suggesting a deceleration in year-over-year growth, is far above historical levels and investor expectations, the analyst said. 

The analyst forecast a combination of near-term momentum and an acceleration of long-term initiatives due to increased awareness and adoption.

See also: KeyBanc Upgrades Wix On Digital Acceleration Tailwinds

Shopify Sees Volume Gains: Shopify's volumes continue to benefit from retailers and merchants racing to launch online initiatives in the wake of brick-and-mortar shutdowns and favorable relative exposure, Beck said.

Factoring in gross merchandise volume growth in the mid-30s for 2021 and given the ongoing benefit from near-term merchant gains, the analyst raised his estimates for the company.

Analyst Says PayPal 'Marquee' Payments Stock: KeyBanc is upwardly adjusting estimates for PayPal, factoring in low-20s total payment volume growth and sustained user and merchant gains for 2021.

"We believe PYPL should be a marquee payments weighting and a premium to peers is warranted due to a further elevated strategic position enabling the future of commerce," Beck said. 

Wix's Potential For Structural Growth Improvement: The analyst said he expects slightly better average revenue per user trends for Wix.com in 2021, resulting in mid-20s-plus revenue growth.

KeyBanc's model does not include an incremental benefit from the official Editor X launch targeted toward pros and agencies, or the Wix e-commerce launch that bundles omni-channel commerce, payments, fulfillment and marketing capabilities, he said. 

Beck raised his Wix estimates and price target due to the potential for structural growth improvement, as well as increased initiative consideration.

The E-Commerce Price Action: Shopify shares were down 1.16% at $940.51 at last check Wednesday. 

PayPal shares were moving up 0.55% to $176.54. 

Wix.com shares were down 0.7% at $273.77. 

Related Link: PayPal To Partner With Broker For Cryptocurrency Offerings On Its Platform: Report

Photo courtesy of Shopify. 

Latest Ratings for SHOP

DateFirmActionFromTo
Jul 2020SunTrust Robinson HumphreyMaintainsHold
Jul 2020Canaccord GenuityMaintainsHold
Jul 2020JefferiesMaintainsHold

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