Goldman Sachs reiterates 'buy' on Worldpay, raises target price

Goldman Sachs has reiterated a ‘buy’ rating on Worldpay and raised its target price to 400p from 350p after the company reported its first half results.

Worldpay on Tuesday said pre-tax profit rose to £168.6m in the first half from £0.3 the same period a year ago, as revenue jumped 10% to £2.14bn.

Net revenue was up 16% to £539.7m thanks to the expansion of business with existing customers, the roll-out of enhanced capabilities and innovation, and new customer wins. Meanwhile, underlying earnings before interest, tax, depreciation and amortisation were 19% higher at £217.9m.

The payments processor declared a maiden interim dividend of 0.65p per share.

Goldman raised its earnings per share forecasts for fiscal years 2016 to 2020 by 4-7% to reflect the better-than-expected results.

“The results continue to underscore our thesis that Worldpay offers exposure to above-market structural growth in the global payments market via its strong positioning in the UK (+12%) and Global e-commerce (+21%) which is driving share gains.”

The bank added: “We expect Worldpay to continue to announce new customer wins and partnerships that should underpin growth well ahead of the market.”

Shares rose 0.71% to 311.20p at 0916 BST.