On Friday, Jefferies, a global investment banking firm, raised its rating for Wise PLC (OTC:WPLCF) from Hold to Buy, significantly increasing the price target to 1,024.00p from the previous target of 717.00p. This adjustment reflects a positive outlook on the company's financial prospects and market position.
The upgrade comes as Wise is recognized for reaching a pivotal moment in the expansion of its Card business. According to Jefferies, this development is expected to fuel the next phase of growth for Wise, building on the success of its foreign exchange transfers and banking-like offerings, which include asset management and interest-bearing products.
Jefferies has introduced the JefData WATT, a new analytical tool that supports their positive assessment. The data from this tool has led to an upward revision of Wise's earnings before interest, taxes, depreciation, and amortization (EBITDA) forecasts for the fiscal years 2025 and 2026. The revised estimates are 23% to 57% higher than previous calculations, positioning them 17% and 26% above the Visible Alpha consensus, respectively.
The firm's commentary highlighted the factors influencing the upgrade, citing international expansion and increased customer loyalty as key drivers of Wise's projected EBITDA growth. Jefferies' outlook is bolstered by the belief that these elements will play a significant role in Wise's continued success and financial performance.
InvestingPro Insights
In light of Jefferies' recent upgrade of Wise PLC (OTC:WPLCF), prospective and current investors might find the latest metrics and insights from InvestingPro particularly enlightening. Wise is not only expected to see net income growth this year, but is also trading at a low P/E ratio relative to its near-term earnings growth, suggesting that the stock could be undervalued given its future earnings potential. This aligns with Jefferies' optimistic price target adjustment and their assessment of Wise's expanding Card business and international growth prospects.
Furthermore, InvestingPro data indicates that Wise has been showing a strong return over the last three months, which could be a sign of robust investor confidence and momentum in the company's stock performance. Although Wise is trading at a high earnings multiple and a high Price/Book multiple, which could signal a premium valuation, analysts predict the company will be profitable this year, which may justify the higher multiples to some extent.
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