Affirm Holdings price target trimmed at Mizuho on Apple Pay competition

Jul. 19, 2021 12:17 PM ET|AFRM, BR...|By: Max Gottlich, SA News Editor|2 Comments

ismagilov/iStock via Getty Images

  • Mizuho Bank analyst Dan Dolev trims Affirm Holdings' (NASDAQ:AFRM) price target as it faces increased competition from Apple Pay's buy-now-pay-later product.
  • Reduces price target to $76 from $90; the target still implies potential 32% upside to AFFRM's closing price of $57.50 on Friday.
  • Mizuho Bank's survey of 178 Apple Pay users indicates 54% are willing to try a potential Apple Pay BNPL product; it also signals significant customer overlap as 60% of Apple Pay users also use BNPL.
  • Dolev notes that Affirm is less vulnerable than other BNPL providers given more modest customer overlap with Apple Pay (20% vs. 20-30% for others) and a higher AOV.
  • Shares of AFRM shares drop 3.1% in midday trading; AAPL -2.4%.
  • Dolev's Buy rating on AFRM is in line with the Bullish Wall St. analyst rating (4 Very Bullish, 3 Bullish, 4 Neutral, 1 Bearish) and diverges from the Neutral average author rating (2 Bullish, 1 Neutral, 1 Bearish).
  • Last week, Apple and Goldman Sachs team up to enter BNPL arena to rival Affirm Holdings.
  • According to the chart below, on a YTD basis the total return for AFRM (+17%) outperforms StoneCo (NASDAQ:STNE) (-32%), Broadridge Financial Solutions (NYSE:BR) (+11%), and S&P 500 (+16%).