Analysts ‘bullish’ on UK fintech Wise despite tariff threat
Wise’s trading update left analysts with a “bullish outlook” on the money transfer firm, but they warned of a tariffs threat.
The UK fintech pocketed £350m in underlying income for the fourth quarter – a 13 per cent jump year-on-year.
International payments bolstered the firm’s intake, soaring 28 per cent to £39.1bn.
This offset a 14 basis point reduction in cross-border take rates, which is the cost of a transaction that is taken by the payment processor as a fee.
Peel Hunt analysts said: “Wise is becoming the category leader in global consumer cross-border payments.”
They slapped an ‘Add’ rating and 1100p target price on Wise’s stock. The firm was down one per cent at 959.5p in midday trading on Wednesday.
Tariffs could hit revenue
Wise announced on April 3 that it would expand its share purchase program for Employee Benefit Trust to ensure no shareholder dilution from historical stock-based compensation (SBC) grants, which represent around 25m shares.
This led to the analysts upgrading their earring per share estimates 16 per cent for 2026 and 20 per cent for 2027.
But, they said Wise growth could be stunted if a tariff-induced slowdown occurs, as trade wars heat up.
The US handed China a 145 per cent duty on imports, to which China responded with a 125 per cent tariff.
This escalating trade war could inflate prices on a wide range of goods, which are essential to Wise’s transaction activity.
“The company remains inherently consumer-focused, with a significant share of personal cross-border flows tied to discretionary spending categories such as travel, holidays, and overseas gifting.
“If the higher tariff situation persists… Wise could face revenue headwinds,” analysts said.
They added any pullback on spending could “weigh on transaction volumes and ultimately impact top-line growth.”
Wise will announce its full-year results on June 5 2025.
The stock is down nearly 10 per cent since the beginning of the year. It plunged in February after the US Consumer Financial Protection Bureau handed it a $2.5m fine.
Analysts expect its underlying profit before tax margin to be around 20 per cent. This matched Wise’s trading update consensus.
The firm said it expects it to be near the top of its 13-16 per cent target range for 2026.