Is this tech company going to outperform expectations in FY 2021?
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The logistics solutions platform provider’s shares ended the day 6% higher at $31.15.
Why did the WiseTech share price zoom higher?
Investors were buying WiseTech’s shares on Tuesday following the release of a positive broker note out of Macquarie Group Ltd (ASX: WTC).
According to the note, the broker has retained its buy rating and $34.00 price target on the company’s shares.
Based on the latest WiseTech share price, this implies potential upside of over 9% even after taking into account today’s gain.
What did Macquarie say?
Macquarie has been reviewing its expectations for FY 2021 and believes WiseTech is well-placed to outperform its guidance. This is despite softer container volumes during the month of April.
WiseTech’s FY 2021 guidance is for revenue of $470 million to $510 million (up 9% to 19%) and EBITDA of $165 million to $190 million (up 30% to 50%). Macquarie feels the company can beat this and deliver a result ahead of the market consensus.
Is anyone else positive on WiseTech?
Macquarie isn’t the only broker that is positive on WiseTech. Morgan Stanley recently put an overweight rating and $35.00 price target on the company’s shares.
While WiseTech may have paused its acquisition strategy, it believes the market is underestimating the upside to WiseTech’s revenues from its freight forwarder customers growing via their own M&A activities.
Morgan Stanley notes that DSV’s recent acquisition of Agility Global Integrated Logistics could lead to more users for WiseTech and higher transaction modules.
Elsewhere, Bell Potter currently has a hold rating and $31.50 price target on its shares. Though, it also acknowledges that there is upside risk to the company’s guidance.
Bell Potter also highlights that WiseTech’s CEO has been selling shares. It sees this as a positive, as it does not believe he would be selling if its result was going to fall short of expectations.
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James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended WiseTech Global. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and WiseTech Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.