A leading technology analyst at Scotia Capital (BNS) is urging investors to load-up on Shopify (SHOP) stock heading into Black Friday this weekend, saying the e-commerce company will benefit from the holiday sales event.
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Kevin Krishnaratne, a four-star rated analyst at TipRanks, says in a note to investors that SHOP stock typically rises in the three weeks surrounding Black Friday each year. Krishnaratne adds that he expects Shopify’s stock to rise during the year-end holidays this year too.
“We think the stock can continue to move higher to close out the year,” he wrote. The bullish call comes despite SHOP stock running hot over the past month following better-than-expected third-quarter financial results. Since the end of October, Shopify’s stock has increased 40%.
Room to Run
Krishnaratne notes in his report that between 2016 and 2023, SHOP stock has averaged a 7.5% increase in the 15-trading-day window around Black Friday. This year, Scotia Capital expects “strong Black Friday, Cyber Monday trends” for Shopify.
Specifically, Krishnaratne forecasts Black Friday sales of at least $4.9 billion for Shopify, which would represent an 18.7% year-over-year increase. Scotia Capital maintains a Buy rating on SHOP stock with a $115 price target. So far this year, Shopify’s share price has risen 45%.
Is SHOP Stock a Buy?
The stock of Shopify has a consensus Moderate Buy rating among 32 Wall Street analysts. That rating is based on 17 Buy, 12 Hold, and three Sell recommendations issued in the last three months. The average SHOP price target of $111.55 implies 0.88% downside risk from current levels.
