Shopify is trending as brands are increasingly interested in the e-commerce platform, according to Deutsche Bank. Analyst Bhavin Shah upgraded e-commerce stock to buy from hold. Shah also raised its price target by $10 to $50, up 23.5% from Shopify’s close on Friday. He pointed to Mattel and Supreme as two examples of brands whose presence is helping Shopify outperform the broader US e-commerce ecosystem. “Many leading brands are now actively looking to migrate or are in the process of migrating from legacy/competitor solutions and we find that this stands in sharp contrast to our conversations over the past 12 months which have consistently highlighted the slowing pace of migration have,” Shah said in a Sunday note to clients. Shopify is up more than 3% in premarket trading and is up 16.6% in 2023. The stock plunged 74.8% in 2022. Shah said one of the biggest potential catalysts for the stock is the launch of Commerce Components, which allows large retailers to pay for access to Shopify’s software, as it could lead to an increase in migrations to the platform. He also said the stock could be supported by what he called a “maturing” partner network, which in turn has helped its reputation with major retailers, increased brand awareness, and increased Shopify adoption and adoption. Shah expects fourth-quarter Merchandise Value to be up 9% versus consensus, but amid the expected mild recession, the buy-side upside in 2023 will be more “moderate.” The pace of operating expense growth is also expected to cool in 2023, Shah said. Still, he said a deeper recession, more corporate spending, or Amazon’s Buy with Prime offering biting into the merchant base could all dent those expectations for the year ahead. Shopify is expected to report fourth-quarter results on February 15. – CNBC’s Michael Bloom contributed to this report.
https://www.cnbc.com/2023/01/23/deutsche-bank-upgrades-shopify-says-stock-can-rally-more-than-20percent-as-more-brands-migrate-to-platform.html Deutsche Bank is upgrading Shopify and says its stock can soar more than 20% as more brands migrate to the platform
