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On Thursday, TD Cowen analyst Bryan Bergin updated his outlook on Adyen NV (AS:ADYEN:NA) (OTC: ADYYF), increasing the price target to EUR1,700.00 from the previous EUR1,620.00. The analyst reaffirmed a Buy rating on the company's shares, indicating a continued positive stance on the stock's long-term performance.
Bergin noted that the Cash App's evolving dynamics could lead to a potential miss in volume growth. However, he expressed confidence that net revenue growth is not at risk. Despite the possibility of limited near-term upside for the fiscal year 2025 estimates, the analyst emphasized Adyen's solid long-term prospects.
The wind-down of Cash App, a significant digital client of Adyen, introduces a layer of complexity to the company's volume growth, especially in the second half of 2024. Bergin pointed out that Adyen's stock has previously experienced volatility when faced with fluctuations in take rate or volume. There is uncertainty about whether the market fully understands the likely volume shortfall due to the decline of Cash App.
Nevertheless, Bergin highlighted that the net revenue growth target for the second half of 2024, which is 'slightly above 20%', remains attainable. This projection implies an approximate 20% net revenue growth for the fourth quarter of 2024. He explained that Cash App's contribution to net revenue was around 1% in the first half, while the total payment volume (TPV), excluding Cash App, grew by more than 25%.
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