Where next for the Afterpay (ASX:APT) share price?

Where next for the Afterpay Ltd (ASX:APT) share price following its impressive half year update and capital raising earlier this week?

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The Afterpay Ltd (ASX: APT) share price has been an exceptionally strong performer over the last 12 months.

Since this time last year, the payments company’s shares have doubled in value.

Where next for the Afterpay share price?

According to a leading broker, the Afterpay share price may have peaked for the time being.

A note out of Goldman Sachs this morning, reveals that its analysts have looked through its half year results and retained their neutral rating.

And while the broker has lifted its price target by 27% to $127.60, this is still a touch below where the Afterpay share price last traded.

What did Goldman say?

Goldman Sachs was pleased with its first half performance and particularly its repeat use metric. It commented:

“APT’s 1H21 result was solid as: frequency of use driving strong unit economics and helping offset opex investment required as it prepares to scale further with an EU launch in 4Q FY21 and Asia still being reviewed (though no new detail was provided).

“We believe customer growth and frequency of use remain the two most important metrics for APT given they indicate product/market fit with consumers, credit quality of its book and are likely indicative of its future pipeline with merchants. We introduce two new earnings streams into our forecasts: cross-border FX and transaction savings account in North America (interchange fee stream). APT also announced a A$1.5bn convertible note to fund increasing its interest in APT US Inc. from 80% to ~93%.”

“Our 12m TP moves to A$127.60 (+27% from A$99.90 previously) implying a potential return of -5%. No change to Neutral rating.”

What about other brokers?

Thankfully for shareholders, there are other brokers that see upside for the Afterpay share price over the next 12 months.

One of those is Credit Suisse. This morning the broker retained its outperform rating and lifted its price target on its shares to $145.00. 

This could mean the gains are not necessarily over for the Afterpay share price just yet.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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