Wells Fargo upgrades Marqeta with important ‘clean-ups’ emerging

Wells Fargo upgraded Marqeta to Overweight from Equal Weight with an unchanged price target of $7. The analyst sees important “clean-ups” for the company “emerging in unison” in Q2 and Q3, leading to a re-rating of the shares. These include the lapping of the Cash App renewal headwind, sustainably positive EBITDA, and a sizable reduction in stock-based compensation, the analyst tells investors in a research note. Wells views Marqeta’s Q2 as a “clearing event,” helping to drive incremental investor interest and trust. It sees consensus estimates as conservative given an implied deceleration in the existing business.