Pine Labs shares rise 2% after Morgan Stanley, Jefferies issue bullish calls: Check target prices

The shares of Pine Labs rose more than 2 percent on December 23 after international brokerages issued bullish calls for the newly-listed stock. The stock is currently nearly 8 percent higher than its IPO price.

The shares of the fintech company were trading at Rs 237.90 apiece in the morning trading hours of Tuesday.

Morgan Stanley on Pine Labs:

Morgan Stanley has initiated an ‘Equal-Weight’ call on the shares of Pine Labs, with a target price of Rs 260 per share. This implies an upside potential of nearly 12 percent from the stock’s previous closing price.

The international brokerage said that the company leads its focus segments with first-mover advantage and a strong partner ecosystem. It expects the firm to post a 19 percent revenue CAGR in FY25-28 and EBIT margin of 20 percent by FY28 on an asset-light shift.

Morgan Stanley said that the ‘Equal-Weight’ rating is assigned at a full valuation of 28x FY28 EV/EBITDA.

Jefferies on Pine Labs:

Jefferies initiated coverage on the shares of Pine Labs with ‘Buy’ call and a target price of Rs 300 apiece. The international brokerage expects the fintech company to post a 23 percent CAGR revenue over FY25-28.

Both Morgan Stanley and Jefferies said that growth will be driven by affordability services and issuing business.

Jefferies said it is factoring the intensity of working capital, including instant cashback, to continue stay high and allow Pine Labs to generate business.

Pine Labs share price:

The shares of Pine Labs made a decent market debut on November 14, listing at Rs 242 apiece on NSE. This marks a premium of 9.5 percent over the IPO price of Rs 221 apiece. The listing premium had beaten grey market estimates.

This came after the Rs 3,900-crore IPO of the company was subscribed nearly 2.5 times its offer size between November 7 and November 11.