Canaccord Canaccord Genuity analyst Joseph Vafi cut his Nuvei Corp. target to US$110 from US$140 with a “buy” recommendation. The average is US$112.29.
“While we believe Nuvei has been on a roll for a while now, still we cannot but be encouraged by impressive business development activity early this year: first with Wix and second with approval by the New York State Gaming Commission to process payments with recently licensed online sports betting platforms (OSB),” he said. “Canaccord’s online gaming equity research team estimates that total betting handle from online sports betting in NY could exceed $20-billion in a few years. Also, we believe that Wix powers 1.6 per cent of global websites.
“While this news flow is in and of itself encouraging, another important takeaway here is that these deals were inked after a character-attack short report was issued last December. The result, in our view, is that the Nuvei value proposition remains quite intact in the marketplace and that the short report has not achieved its goal of creating growth headwinds. This has created an ever-greater disconnect between financial performance and NVEI share price, as the stock remains at similar levels to when the short report was issued. With Q4 earnings de-risked by management’s reaffirmation of its short- and medium-term outlooks, we see attractive risk/reward in NVEI shares despite market conditions.”