Video

#SaxoStrats
Today's edition of the Saxo Morning Call features the SaxoStrats team discussing the continuing weakness of the US dollar as commodity prices recover ground and in the wake of key US equity indices hitting all-time highs Thursday.
Strategic trade
Trade view / 26 April 2016 at 9:26 GMT

#SaxoStrats: High growth and strong 2016 awaits Wirecard

Head of Equity Strategy / Saxo Bank
Denmark
Instrument: WDI:xetr
Price target:
Market price:
picture
 
Background

Wirecard is a leading specialist for payment processing and issuing across online, offline and mobile. It is growing at around 30% y/y (organic) with high growth projected over the coming years. The CEO has said that Wirecard is off to a strong start in 2016, which has still not been rewarded in the market. 

The company plans to enter the US market within 12-18 months which would significantly broaden its market opportunity and growth potential despite intense competition. The big change in POS transactions moving toward mobile is playing to Wirecard’s strength. In our view Wirecard is one of the cheapest growth stocks in Europe with a very low valuation.

Key risks

Q1 earnings on May 19. Stronger EUR hurting 30% of revenue from outside Europe. Pricing pressure due to competition.

Parameters

Buy Wirecard (WDI:xetr) at market with a trailing stop (stop price €28.70) moving in steps of €0.67. Our price target is €50 by year-end. The big distance to our initial stop is reflected by recent high volatility in the stock price.

price performance
Source: Saxo Bank 

valuattion
Source: Saxo Bank 


key figs
 
— Edited by Clare MacCarthy

Non-independent investment research disclaimer applies. Read more

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