Shopify: JPMorgan bullish, cites competitive edge

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JPMorgan (JPM) analysts are voicing bullish sentiment around Shopify (SHOP), initiating coverage on the stock with an Overweight rating. The firm’s analysts cite Shopify’s competitive advantages and significant margin expansion opportunities as key drivers for their optimistic outlook.

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This post was written by Angel Smith

Video Transcript

But more bullish shines here.

Now, Shopify is getting a bullish call from JP Morgan, the firm initiating coverage with an overweight rating saying the company’s quote competitive moat warrants a premium evaluation.

You’re seeing Shopify shares up a little over 1% there.

Now J PM out of the company has distinct competitive advantages that will continue to fuel industry leading growth.

The bank also sees a margin opportunities as well.

If you take a look at a longer term chart, shares have been under pressure so far this year down about 17% over the past three months as well.

But J PM saying that creates an attractive entry point for investors.

So potentially more upside on the horizon, the bank has a $74 price target.

So about 20% upside here based on current trading levels.

Yeah, it’s interesting because this is another name that’s been under a lot of pressure recently, even just last week, we saw Moffett Nathanson cutting Spotify to neutral.

So the kind of opposite move as what we’re seeing today in terms of the market reaction there, that price target cut coming from off that Nathanson saying that they had previously, you know, had an outperform rating on this name, the stock had risen, an average of 63% periods rated market perform for Mo Mo Na.

And but now seeing the stock falling to the downside and it points to kind of a broader question about what the long term value that is going to be for Shopify and whether or not the kind of juice has already gotten as much squeeze as possible for some of these e commerce names, particularly as we do start to see a little bit of struggle within the consumer space.

What is that going to mean for a company like Shopify?