The Afterpay Ltd (ASX: APT) share price is rocketing again today, up 7.39% in late afternoon trading. That puts Afterpay’s share price gains at 28.4% so far in August, and the share price is up a smashing 188% since 2 January.
If you’d bought shares of Australia’s buy now, pay later (BNPL) darling on the 23 March low, following the COVID-19 market rout, your Afterpay shares would have gained 888%.
Afterpay is an S&P/ASX 200 Index (ASX: XJO)-listed company. By comparison, the ASX 200 is up 35% from its 23 March low.
What does Afterpay do?
Afterpay is an Australian incorporated technology company and a leader in the BNPL market. Afterpay’s payment platform allows consumers to purchase and receive goods and spread the cost of their purchase out over equal payments, without any interest fees.
The company was founded in 2015 and commenced trading on the ASX in June 2017. These days, the company operates in Australia, the United States and the United Kingdom, with current expansion plans into the wider European market.
Why is the Afterpay share price up 7% again today?
Afterpay received a welcome boost in today’s trading (as if it needed one) after 3 brokers raised their target prices for the company’s shares.
Afterpay’s acquisition of Spanish BNPL start-up Pagantis appears to be a savvy move to expand its operations into the wider European market.
Morgan Stanley raised its target for Afterpay to $106 per share. That’s more than 19% above Afterpay’s current share price of $88.84.
Wilson’s also increased its price target from $60.49 to $94.16, and upgraded its rating from market weight to overweight.
We previously held reservations around Afterpay’s ability to ward off strong global competitors, and endure the systemic upheaval of COVID-19 on end-customer repayment ability. To date, these concerns have yet to materialise, and rather than focusing on what could go wrong, we take a fresh view of what has, and what could continue to go right.
Wilsons forecasts Afterpay will be profitable in FY22.
Bell Potter joined the broker cheerleading, raising its price target from $92.50 to $96.70.
Analyst Lafitani Sotiriou said (as quoted by the AFR):
Pagantis brings important payment infrastructure and knowledge, licences and 69 full-time equivalent staff to get the Clearpay brand launch ready for early next calendar year. This is a familiar way Afterpay enters a new market by finding a local knowledge base or partner, and building its business from there.
Following on its market-leading success in Australia and its penetration into the US markets, the recent Afterpay share price gains indicate the market believes this company has a lot of growth potential still ahead.
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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