- Apple Inc AAPL and Goldman Sachs Group Inc GS jointly launched a Buy Now, Pay Later (BNPL) service.
- Affirm Holdings Inc's AFRM shares lost 10% on the news, Truist analyst Andrew Jeffrey noted. The drop appeared as an overreaction to him.
- If the offering remains restricted to Apple Cards, it will represent a comparatively small total addressable market versus Affirm's leading position as an enterprise BNPL provider, Jeffrey reasoned.
- BNPL industry is known for its competitiveness and low barriers to entry. So Jeffrey would be adding to Affirm positions given its superior merchant integrations and complex underwriting abilities that differentiate it from primary split pay competitors like PayPal Holdings Inc PYPL, Afterpay Ltd AFTPF, and Klarna.
- Jeffrey reiterated the Buy rating on Affirm with an $82 price target implying a 26.2% upside.
- Price action: AAPL shares traded higher by 1.61% at $147.98, and AFRM shares traded higher by 1.05% at $58.82 in the premarket session on the last check Wednesday.
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