What 2 top brokers currently think of the Afterpay share price

With the issues flagged by AUSTRAC earlier this year looking to be almost behind Afterpay (ASX: APT), we examine what two of Australia’s top brokers are currently saying about the company.

Afterpay share price trades flat

The Afterpay (ASX: APT) share price was subdued today – dropping almost a full percentage point a little after noon – following the release of yesterday’s AUSTRAC requested audit report summary to the market.

Speaking to the potential consequences of the AUSTRAC situation and according to Nathan Lynch, Manager of Regulatory Intelligence at Reuters:

‘One possible scenario is that AUSTRAC may decide to fine Afterpay, or litigate, in the knowledge that Afterpay may well lodge a claim against its own legal advisers.’

The suggestion that Afterpay would be fined by AUSTRAC has been a question long-pondered by the market: the specifics of such a suggestion were always more important than the suggestion itself however. That is, how significant could a potential fine be?

It seems the upbeat independent auditor's report summary has implied that it may not be that material, though, at least that's what Morgans thinks. Indeed, no monetary penalties – just recommendations for Afterpay to implement – were flagged in the report summary.

With this in mind, two of Australia’s top brokers: Morgan Stanley and Morgans took today as a chance to reiterate their positive views on the company.

Practise trading Australian tech stocks with an IG demo account now

Morgan Stanley remains overweight

A lack of any monetary penalties being flagged was one of the core reasons that Morgan Stanley today remained overweight on APT and reiterated their $44.00 share price target on the company.

Not only that, but Morgan Stanley pointed out that the Final Audit Report Summary does not recommend any significant operational changes to Afterpay; nor did the external auditor discover anything drastically negative about the actions of Afterpay’s Board during his investigation.

Afterpay, says the external auditor, has a strong compliance culture overall.

Indeed, Morgan Stanley itself pointed out that not only was Afterpay’s ‘non-compliance historical’ and caused by incorrect legal advice, but that the company currently has an appropriate AML/CTF program in place.

Morgans lifts their price target

While Morgan Stanley took today as a chance to reiterate an already bullish price target, Morgans used it as a chance to bump theirs up.

Here, Morgans pushed their 12-month price target up to $35.82 on Afterpay and maintained their add recommendation.

Like Morgan Stanley, Morgans noted that while Afterpay committed historical compliance breaches in its infancy, its AML/CTF systems currently are – in the words of the independent auditor – ‘effective, efficient and intelligent.’

On the front of a potential fine, Morgans noted that while it remains a possibility, relative to APT’s significant $8bn market capitalisation – it looks ‘immaterial’.

Even so, given the given the historical breaches, Afterpay will still likely have to rely on leniency from AUSTRAC.

Indeed, Morgans used the $45m fine AUSTRAC imposed on Tabcorp in 2017 as the upper-benchmark fine possibility that APT could face.

In saying that, Morgans ranks a fine even of that magnitude as immaterial to Afterpay’s long-term prospects.

Start trading Afterpay, Zip and other tech stocks with an IG demo account now

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

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.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices 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.