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JPMorgan Upgrades Qiwi: 'We Are Encouraged By Improving Operating Trends'

Priya Nigam

Qiwi PLC (NASDAQ: QIWI) reported first-quarter results ahead of consensus expectations and raised its full-year guidance Thursday. 

The Russian payments company delivered high-quality growth in the quarter and was able to report a solid earnings beat on the back of operating leverage, despite investments into new divisions, according to JPMorgan.

The Analyst

Alexei Gogolev upgraded Qiwi from Neutral to Overweight and raised the price target from $19 to $20.

The Thesis

Qiwi reported 31-percent year-on-year revenue growth for the first quarter.

Its EBITDA surged 61 percent to 2.3 billion rubles ($35.6 million), 34 percent higher than the consensus estimate.

Net income rose 53 percent to a record high quarterly net income figure in the company’s history, Gogolev said in the Thursday upgrade note. (See his track record here.) 

Qiwi’s core verticals achieved solid revenues, backed by volume growth, the analyst said. Both e-commerce and money remittance outperformed during the quarter, with volumes up 79 percent and 36 percent, respectively.

View more earnings on QIWI

This may have resulted in market share gains, Gogolev said. 

Qiwi raised the revenue growth and net income guidance for 2019 from a range of 0-8 percent to 9-15 percent and from 15-25 percent to 40-50 percent, respectively. The guidance now implies potential dividend upside of around 20 percent, the analyst said. 

“While the company is yet to announce the new CFO, we are encouraged by improving operating trends." 

Price Action

Qiwi shares were rallying by 14.81 percent to $15.66 at the time of publication Thursday. 

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Earnings Scheduled For May 16, 2019

Latest Ratings for QIWI

Date Firm Action From To
Feb 2019 Downgrades Overweight Neutral
Aug 2018 Maintains Buy Buy
May 2018 Downgrades Neutral Underperform

View More Analyst Ratings for QIWI
View the Latest Analyst Ratings

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