As Wirecard Slumps, Virus Drives Rival Payment Stocks to Records
As Wirecard Slumps, Virus Drives Rival Payment Stocks to Records
(Bloomberg) -- Wirecard AG shares might be plunging amid an accounting scandal, but some of its payments-processing rivals are trading near record highs as coronavirus lockdowns drive demand for contactless payments and online shopping.
Dutch payments firm Adyen NV, which has surged 78% this year to make it one of Europe’s top-performing stocks, closed at a record high Tuesday, as did U.S. firm Square Inc. Meanwhile, PayPal Holdings Inc. reached its highest-ever level on the same day. Worldline SA has gained 16% in Paris this year and is within 5% of its February peak.
“More online transactions and fewer cash payments are the new trend as lockdowns ease,” Berenberg analyst Tammy Qiu said in a note on Thursday, raising price targets for Worldline and PayPal. Qiu is turning more positive about the payment industry thanks to an acceleration in digital transactions, prompted by increasing e-commerce.
Some analysts also see peers potentially winning business as a result of the demise of Wirecard, which filed for insolvency in Germany on Thursday after more than $2 billion went missing from its balance sheet. Its shares have lost 96% of their value this year.
While it is “impossible to say who will win at this stage,” Worldline is among those who could benefit from Wirecard’s collapse, said Oddo BHF analyst Stephane Houri in emailed comments. Worldline has large exposure to both the online and German markets after the acquisition of Ingenico Group SA, he said.
For Jefferies analyst Julian Serafini, Adyen is “well positioned” to capture customers who decide to leave Wirecard, given that 88% of the Dutch company’s payment volumes come from online channels, he wrote in a June 18 note.
Still, Mirabaud Securities’s Neil Campling cautioned that, while there is an opportunity for some incremental business gains for Wirecard rivals, he believes that most of the beleaguered firm’s business was “fictitious,” so there isn’t a lot to go around.
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