On Wednesday, Barclays (LON:BARC) expressed a positive outlook on Adyen NV (AS:ADYEN:NA) (OTC: ADYYF), with analyst James Goodman increasing the price target to €1,700, up from the previous €1,610, while maintaining an Overweight rating on the stock. Goodman's optimism is rooted in various factors, including industry discussions, incremental take modelling, and an analysis of the merchant and regional mix. Additionally, the potential impact of Adyen's expansion into embedded finance was considered.
Goodman's analysis suggests that despite an anticipated continued decline in the take rate, Adyen's net revenue is expected to grow at a compound annual growth rate (CAGR) of 13% until FY35E. This forecast leads to an upward revision of more than 10% for the company's FY35E revenues. The confidence in Adyen's sustained growth trajectory is further bolstered by Goodman's assessment of the company's competitive position in the market.
The revised price target of €1,700 is based on a 38x FY26E price-to-earnings (P/E) multiple, which is a decrease from the previous 45x FY25E P/E multiple. This adjustment reflects a refined valuation approach in light of the company's future earnings projections.
Adyen, a payment company that offers a platform integrating gateway, risk management, processing, acquiring, and settlement services, has been expanding its footprint in the realm of embedded finance. This expansion is expected to contribute positively to the company's revenue growth, as highlighted by the Barclays analyst.
The Overweight rating indicates that Barclays expects the stock to outperform the average total return of the stocks in the analyst's coverage universe over the next 12 to 18 months. The new price target suggests that Barclays sees further upside potential for Adyen's shares from the current market price.
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