ASX 200 passes 6000, Citi raises Afterpay price target to $64.25

The Australian benchmark flirts with the 6,000 point level, Afterpay makes new highs and iron ore prices remain elevated.

ASX 200 retains its momentum

It's been a bullish week for the ASX 200 benchmark, with the key Australian index trading 2.05% or 119 points higher between Monday and Wednesday. The ASX retained that momentum on Thursday – following a relatively optimistic US session overnight – trading past the 6,000 point mark a little after noon.

The ASX 200 last traded at 6,033 points.

On a more granular level, at the time of writing, real estate investment trusts (A-REITs) and information technology stocks were the best performing in Australia; while ASX-listed materials stocks were the worst performing.

Afterpay share price hits new all-time highs

Market darling Afterpay (APT) has been a standout performer in recent weeks – with the fast-growing company continuing to make higher highs. At the time of writing the Afterpay share price traded at $66.87 per share, some 700% higher than it did in March, on an implied market cap of $16.68 billion.

This comes after the fast-growing company last week announced that the UK-based Clearpay – which APT purchased in August 2018 – had reached 1 million active customers in its first year of operations. More positive still, in a statement to the market, Afterpay said that 'Customer purchasing frequency in the U.K. is outpacing the U.S. when it was at the same stage of lifecycle, with customers transacting more than 8 times within the first year compared to the U.S. which was at 6 times during its first year.'

Citi analysts, reassessing the assumptions on the stock, today raised their price target on Afterpay from $27.10 per share to $64.25 per share – though maintained their Neutral/High Risk rating.

Centrally, Citi analysts argued that APT is set to be a key benefactor of the accelerated shift to e-commerce, with the investment bank expecting the company’s gross merchant volumes (GMV) to grow by ~70% in fiscal 2021.

Even so, the investment bank remains aware of the risks facing the company, saying ‘we are cautious on the outlook for consumer discretionary spend and bad debts when fiscal stimulus measures end.’

Other bits and pieces

Elsewhere this week, online furniture and homewares company Temple & Webster (TWP) reported that it had successfully completed a $40 million capital raise; AMP Limited (AMP) finalised the long-awaited sale of AMP Life to UK-based Resolution Life, in a deal valued at $3.0 billion; and J Capital resumed its criticism of WiseTech Global (WTC).

In commodity markets, West Texas Intermediate's front-month contract traded at US$39.87 per barrel; while Brent Crude – the international benchmark – saw its front-month contract trade at US$42.10 per barrel, as of 11:38PM (EDT).

By comparison, gold and silver futures contracts were both down; while iron ore futures continued to trade around US$100 per tonne, as supply-side issues persist.

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