Toast upgraded to Buy on pricing power at Redburn Atlantic

Redburn Atlantic upgraded Toast to Buy from Neutral with a $28 price target. The analyst cites the company’s “underappreciated” pricing power, enhanced operating leverage and ability to sustain elevated revenue growth for the upgrade. Toast’s ability to maintain a stable gross payment take rate while onboarding larger merchants is clear evidence of pricing power on small business merchants, the analyst tells investors in a research note. The firm sees software price hikes next with further earnings upgrades likely as Toast’s extensive product suite matures.