Emerging macroeconomic headwinds have cast a shadow over Europe’s financial technology and payments sectors, but London-listed disruptor Wise PLC (LSE:WISE) is one of the best placed to face these challenges head on.
That is investment bank Jefferies’ take on the current situation, with analysts noting Wise’s “steady execution of customer growth” in the lead-up to a third-quarter earnings call later this month.
Since fintech and payments platforms are highly exposed to market cycles, analysts expressed caution that, despite inflation finally coming down to earth, this “is not offset by macro improvement as of now, suggesting an overall cautious outlook into (second-half) trading”.
A spate of profit warnings across the retail (see H&M and Burberry Group PLC (LSE:BRBY)) and auto (see VW) sectors have not helped the outlook, nor has a sharp drop in UK consumer confidence.
“European payment companies have seen negative consensus revisions in 2024, with most players facing headwinds,” noted Jefferies, though Wise’s status as a disruptive global money transfer giant puts it in a unique position.
"Wise's multiproduct strategy enables it to monetise consumer activity on a very favourable cost structure, boosting confidence in medium-term growth outlook,” said analysts.
Jefferies has a 'buy' rating on the stock with a 986p price target against the current 670p price.
Wise's second-quarter results are due on 15 October.