On Thursday, Goldman Sachs adjusted its outlook on Wise plc (WISE:LN) (OTC: WPLCF) shares, reducing the price target to GBP11.10 from the previous GBP13.00, while reiterating a Buy rating on the stock. The adjustment followed the company's full fiscal year 2024 results, which were announced earlier in the day.
Wise's reported revenues aligned with its trading update, but the performance beneath the top line surpassed expectations. The firm has forecasted a total income growth for FY24 in the range of 15-20%, which encompasses both Goldman Sachs' and market consensus estimates of 15% and 20%, respectively.
The company also revised its medium-term goals, now expecting a total income growth of 15-20%, compared to the previous projections of 21% compound annual growth rate (CAGR) by Goldman Sachs and 22% by the consensus.
Additionally, Wise projected an underlying profit before tax (PBT) margin of 13-16% for fiscal year 2026, which is slightly below the 18% and 19% anticipated by Goldman Sachs and consensus figures, respectively.
The release of Wise's full FY24 results and the updated guidance have prompted the firm's reassessment of the financial outlook, leading to the updated price target. The company's performance and future income growth projections play a significant role in the valuation and investment outlook provided by Goldman Sachs.
Despite the reduction in price target, the investment firm's continued endorsement of a Buy rating indicates a positive view on Wise's stock potential moving forward. Goldman Sachs' analysis reflects its expectations based on the company's reported outcomes and updated forecasts for the coming years.
In other recent news, Barclays has upgraded its rating of Wise plc to Overweight, citing the company's growth potential. The financial institution has increased its price target for Wise from £8.00 to £10.00, reflecting their confidence in the company's ability to sustain growth above 20% in the mid-term.
Meanwhile, Morgan Stanley has maintained its Overweight rating on Wise with a £10.70 price target. The firm's revenue forecast for Wise aligns closely with market expectations, predicting total income for the fourth quarter of 2024 to be approximately £381 million.
Jefferies has also expressed confidence in Wise, maintaining a Buy rating on the stock and raising its price target to £11.23. This follows the appointment of Emmanuel Thomassin as CFO, a move seen by Jefferies as a positive development for the company.
These are recent developments that emphasize the strong financial fundamentals and growth prospects of Wise, as recognized by several prominent financial institutions.
Lastly, Jefferies has adjusted its EBITDA forecast for Wise, which now stands 29% higher than earlier estimates. This improvement has led to an increase in the discounted cash flow-based price target, now set at 1,123p, up from 1,024p. The new price target represents Jefferies' confidence in Wise's growth trajectory and operational efficiency.
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