Piper downgrades Shopify to Underweight on ‘untenable valuation’

Piper Sandler downgraded Shopify to Underweight from Neutral with a price target of $56, down from $58. The shares at current levels hold an “untenable valuation,” the analyst tells investors in a research note. While secular drivers like e-commerce penetration, market share opportunity and take-rate expansion will continue to benefit Shopify’s growth and profit trajectory, the growth and profit assumptions embedded into the shares are “too aggressive” following the stock’s 50% post-earnings rally, says Piper. The firm says Shopify’s fundamentals are set to moderate in 2024 “as the company clears events unique to 2023.”