Scotiabank starts Shopify at Sector Perform on ‘robust’ valuation

Scotiabank analyst Kevin Krishnaratne last night initiated coverage of Shopify with a Sector Perform rating and $43 price target. The analyst believes Shopify "should be a core tech holding given its position as a category leader helping to rewire the retail industry." However, the neutral rating reflects the stock’s "robust" valuation following the 40% year-to-date and near double September lows, the analyst tells investors in a research note. Although recent subscription plan price increases could lead to some upward revisions to Street estimates Subscription Solutions revenue, downside risks still exist for Merchant Solutions revenue given weakening consumer spending trends, contends the firm.