Skip to content

CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Morgan Stanley's $242 Afterpay bull-case; Sezzle poised to raise new capital

As Sezzle plans a ‘material’ capital raise, we examine Morgan Stanley’s revised outlook on Afterpay.

APT & SZL Source: Bloomberg

Afterpay share price continues to trade higher

Afterpay (APT) continues to break all-time highs, closing out Thursday’s session up 11.4% at $73.58 per share. At those levels, APT has an implied market capitalisation close to $18.0 billion.

This comes after Morgan Stanley significantly changed their view on the company in the wake of its recent trading update and $800 million capital raise. Here, the investment bank, which previously had an Equal-weight rating and $36.00 price target on the stock – upgraded Afterpay to Outperform and slapped a $101.00 per share price target on the company.

Overall, the investment bank said that Afterpay had defied expectations, with the company’s recent business update exhibiting stronger trends that MS analysts had anticipated. MS was also impressed by Afterpay’s ‘credit quality control’ and its diversification away from the fashion segment, which APT has historically prioritised.

From a valuation perspective Morgan Stanley’s $101 price target implies a FY21 price-to-sales multiple of 31x – a multiple that MS analysts believes is warranted, though ‘challenging’, given APT’s globally-focused growth outlook.

Mind you, should a confluence of positive conditions be met, Morgan Stanley believes that Afterpay could trade as high as $242.80 per share – implying a staggering FY21 price-to-sales multiple of 75x – under the investment bank’s ‘bull-case’ scenario. The investment bank summarised the conditions required to get to that lofty price target as follows:

‘Our bull case captures an Australian global success story. Uptake in Canada takes off rapidly, US re-opens translate to rapid uptake in in-store adoption and strong omnichannel penetration. APT's expansion into other lucrative markets, i.e., Asia comes to fruition and valuable e-commerce partnerships are established in the US.’

Morgan Stanley’s bear-case, by comparison, values APT at just $25.39 per share.

Sezzle sets its sights on ‘material’ raise

Elsewhere in the buy now pay later sector, on Thursday Sezzle (SZL) requested its stock be put in a trading halt pending news of a ‘material’ capital raise.

Before being put into that trading halt, which came into effect a little after 1PM (AEDT) – investors bid the stock some 40% higher, to $6.95 per share. At its intraday peak, Sezzle traded close to $8 per share.

According to the Australian Financial review, Sezzle is ‘considering an $80 million raising with the help of stockbroker Ord Minnett,’ in a move aimed at accelerating the company’s growth trajectory.

As we reported earlier this week, Sezzle capped off the second quarter in stellar fashion, recording a record set results which saw underlying merchant sales (UMS) rise 349% to US$188 million, merchant fees climb 397.1% to US$10.6 million; while active customers more than tripled during the quarter, reaching 1.48 million.

Want to trade BNPL stocks: long or short?

Create an IG trading account or log in to your existing account to get started now.


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Act on stock opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.