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Noah Zivitz

Managing Editor, BNN Bloomberg


Nuvei Corp. found support from analysts after it sought to calm the waters in the aftermath of a short-seller’s report that knocked its stock down by as much as 56 per cent Wednesday. 

Meanwhile, in a statement issued Wednesday night, Nuvei dismissed the 119-page report by Spruce Point Capital as being “intentionally misleading.”

In that report, Spruce Point criticized the Montreal-based payments processor’s management, and questioned the company’s takeover track record as well as its disclosures. 

Spruce Point put a “strong sell” opinion on the stock, and said it sees up to 60 per cent down side risk for investors. 

“The company urges investors to not make decisions based on the short seller report and to review public filings for material information that pertains to its business,” Nuvei said in its release. 

Despite the short-seller’s criticism, analysts largely remain bullish on Nuvei. Among the 14 tracked by Bloomberg, 12 analysts (including one who upgraded Wednesday) say Nuvei is a buy, while the other two have hold recommendations. The consensus price target on Nuvei’s U.S.-listed shares is US$130.79, implying 115 per cent potential upside from Thursday’s closing price. The implied upside for Nuvei’s TSX-listed shares is almost the same, at 113 per cent. 

Here’s a roundup of what some of those analysts are saying about Nuvei in the aftermath of Spruce Point’s report:

Keefe, Bruyette & Woods Analyst Sanjay Sakhrani (Rating: Outperform; Price target: US$140.00)

“Our read so far is that while the short report raises a lot of doubts on the credibility of the business, there is not necessarily a smoking gun. But these types of events can create a prolonged overhang and uncertainty until decisively cleared and the company’s ability to provide a more aggressive point-by-point defense (which is a top priority for them) would go a long way in easing investor concerns.”

Raymond James Analyst John Davis (Rating: Outperform; Price target: US$166.00)

"We would point out that the short seller’s argument for the stock being overvalued is based on their belief the relative premium to peers should diminish (claims 6-9x/15-20x ‘22 revenue/adjusted EBITDA is appropriate) given “concerns around management, and suspicious post-closing financial improvement in the performance of its targets”, rather than any meaningful concern around its future financial performance (short seller’s 2022 adjusted EBITDA estimate is just five per cent below current Street estimates).”

BMO Capital markets Analyst James Fotheringham 

“Following our detailed review of the short report, we make no changes to our Nuvei model, and we maintain our US$114 target price. Consequently, we upgrade our rating from market perform to outperform, and we recommend [growth at a reasonable price]-oriented investors buy Nuvei shares.”

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