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Redburn-Atlantic downgraded Wise (LON:WISEa) plc (WISE:LN) (OTC:WPLCF) from Buy to Neutral on Wednesday, while raising its price target to GBP12.50 from GBP11.90.
The research firm cited Wise’s share price outperformance against both the payments sector and the S&P 500 as a key factor in the downgrade decision. This outperformance has led to a rerating to 32x FY27 P/E, which Redburn-Atlantic now views as an elevated valuation level.
Redburn-Atlantic noted that 2024 was "a stellar year for Wise with several significant Platform wins," which validated the strength of the company’s technological advantages. Despite these positive developments, the firm believes there is limited potential for further rerating at current price levels.
The downgrade reflects Redburn-Atlantic’s assessment that any future share price outperformance would need to be driven by earnings per share growth rather than multiple expansion. The firm’s analysis suggests there will not be any upgrades to consensus estimates this year.
Redburn-Atlantic also warned that rising regulation could potentially result in modest downward pressure to estimates, further supporting its decision to move to a Neutral rating on Wise stock.
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