JP Morgan has urged investors not to get distracted by technicalities around Wise PLC's (LSE:WISE) planned US listing, arguing that the payments group’s long-term growth story remains intact.
The broker reiterated its 'overweight' rating and 1,380p price target.
The move to the US has dominated recent discussion about the shares, with many trying to second-guess how trading volumes and index inclusion might affect performance in the short term.
But JPM's analysts caution against putting too much weight on those issues. “Precedent shows us that fundamentals remain the main driver before a change in listing,” he wrote.
On that score, the picture is still encouraging. While Wise had a slightly slower start to the financial year than expected, volumes and revenues continue to grow, and the business remains relatively insulated from wider macroeconomic pressures.
The American bank sees Wise as “well-positioned for long-term market share gains translating into an attractive financial profile”.
Wise’s edge comes from its low-cost, cross-border money transfer model, which undercuts traditional banks and has won a loyal customer base across both consumers and small businesses.
That advantage should allow it to keep growing volumes at a healthy pace, even if the broader economic backdrop is patchy.
JP Morgan’s stance is that the US listing, while important for broadening the investor base, is not the thing that will drive earnings or cash flow.
What matters is the ability to keep scaling the network, defending margins and gradually taking share in a huge global market for international payments.
The shares were flat at 1,069p.