Shopify Inc (TSX:SH., NYSE:SHOP) received a boost on Monday after Citi reiterated its Buy rating on the e-commerce platform, citing expected growth in the second half of 2024 and improved profitability beginning in 2025.
In a note, analysts at Citi expressed "incremental confidence" in the adoption of Shopify’s Payments platform and the cross-selling of key Merchant Solutions products such as Capital, Installments, and Cross-Border offerings, following recent discussions with the company’s Investor Relations team.
Citi projected Shopify’s revenue growth to accelerate in the latter half of the year, with EBIT (earnings before interest and taxes) expected to increase 60% year-over-year in 2025—more than 20% higher than consensus estimates.
“We also view Shopify as a beneficiary of a lower rate environment, which will benefit consumers, merchants and drive GMV,” Citi wrote.
The bank estimated Shopify’s GMV to reach approximately $645 billion by fiscal year 2028.
Citi also raised its EBIT forecasts for the third and fourth quarters of 2024, seeing more upside potential than current street estimates. The price target for Shopify was lifted to $103 from $90, based on the bank’s updated valuation framework.