Fintech stock to buy? Analysts give this global stock over 140% upside
by James · February 9, 2023
Shares in PensionBee, the UK digital pensions provider, are expected to more than double within a year, according to a number of analysts. Bank of America said the fast-growing fintech company “achieved significant financial and strategic success” over the past year after it disclosed its latest quarterly results last month. As a result, the Wall Street bank expects the stock to rise 216% to £2.17 ($2.63) over the next 12 months. The upbeat outlook would be a reversal for the fast-growing company’s shares, which fell 60% in 2022 amid a broader sell-off in UK small and mid-cap equity markets. It was trading at £0.70 a share on Thursday afternoon. However, the stock has clawed back some of those losses and is up 26% this year on a positive outlook from analysts, as the company is expected to be profitable by the next financial year. “Achieving this after the challenging market conditions of 2022 is a testament to the company’s business,” BoA analysts led by Philip Middleton said in a Jan. 23 note to clients. “Once PensionBee becomes profitable, we believe it will be significantly cut back.” PBEE-GB 1Y line The bank is not alone in its positive view of PensionBee. The consensus price target of five analysts covering the company gives the stock 146% potential upside. Berenberg said PensionBee’s high brand recognition in the UK means the company can reduce marketing costs in the future, which will help them achieve profitability. The German investment bank expects the stock to rise more than 143% over the next 12 months to £1.70. “We expect marketing costs to decrease compared to [financial year] 2022 levels,” said equity analyst Alexander Bowers. “This reduction is expected to be driven by the company’s improved brand recognition (more than 50% of people now know the brand name, based on consumer survey data).” Founded in 2014, PensionBee now has £3bn of assets under administration across 183,000 clients.Comparatively, competitor Hargreaves Lansdown manages £39bn of assets on its self-managed pensions platform, the largest in the UK PensionBee’s growth target – at 2% of the £700bn UK pensions market – long term now looks more achievable, according to Bank of America, thanks to the company’s 2022 results. it is reasonable to assume, we believe, that it will flourish in the future,” they added.
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