On Thursday, Jefferies maintained a Buy rating on Wise plc (WISE:LN) (OTC: WPLCF) and raised the share price target to GBP11.23 from GBP10.24. The adjustment follows insights from the firm's 2nd Payments Summit, where Wise's Head of Finance presented.
Jefferies' JefData Job Tracker indicates that the company's hiring in the second half of the fiscal year will be significantly lower than previously anticipated, with about 370 new hires compared to the expected 1,350. This reduction in hiring is projected to decrease operating expenses and increase EBITDA by approximately 14%.
The updated EBITDA forecast now stands 29% higher than earlier estimates. This improvement in the company's financial outlook has led to an increase in the discounted cash flow (DCF)-based price target, now set at 1,123p, up from 1,024p.
Jefferies' positive stance on Wise is further supported by the increase in daily usage of Wise's services, which, according to the firm's update, positions Wise more closely to neo-banks in terms of operational metrics and customer engagement.
Wise is scheduled to release its fourth fiscal quarter trading update on April 16, before the market opens. The forthcoming report is anticipated to provide further details on the company's performance and may offer additional insights into the financial trends that have influenced Jefferies' revised price target and outlook.
The new price target represents Jefferies' confidence in Wise's growth trajectory and operational efficiency. With the reduction in anticipated hiring, Wise is expected to leverage cost savings to bolster its bottom line, potentially delivering a stronger financial performance than previously forecasted.
The market will be watching closely for the April 16 trading update, which could provide a clearer picture of Wise's fiscal health and future prospects.
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