Wise Shares (LON:WISE) Upgrade Signals Renewed Confidence

Shares of Wise plc (LON:WISE) experienced a boost today, trading 0.6% higher into the close following an upgrade by Rothschild & Co Redburn, signaling renewed confidence in the company's growth prospects. The financial technology firm, specialising in cross-border money transfers, has been the subject of increased market attention due to its strategic initiatives and recent financial performance.

The upgrade from Neutral to Buy by Rothschild & Co Redburn, accompanied by a price target of 1,390p, served as a catalyst for positive market sentiment. The firm's analysis projects a robust 23% underlying income growth for Wise Platform, translating to a 15% underlying earnings growth through fiscal year 2028. This projection hinges on Wise's continued expansion in its customer base and transaction volumes, crucial drivers of its revenue.

Wise's financial results for the year ending March 31, 2025, further support this optimistic outlook. The company reported a 16% increase in underlying income, reaching £1.36 billion, compared to £1.17 billion in the previous year. Active customers grew by 21%, totaling 15.6 million, while cross-border volumes increased by 23% to £145.2 billion. These figures demonstrate Wise's ability to attract and retain a growing customer base, solidifying its position in the competitive global money transfer market.

Looking ahead, Wise has committed to significant investments, allocating approximately £2 billion over the next two years to enhance its infrastructure, marketing efforts, and product development. This strategic move aims to capture a larger share of the substantial cross-border payments market, estimated to be worth trillions of dollars annually.

The company maintains its guidance of achieving a 15-20% compound annual growth rate in underlying income over the medium term, providing a clear roadmap for future expansion. Furthermore, Wise's plans to pursue a dual listing of its shares in the U.S. and the U.K. reflect its ambition to enhance liquidity and broaden its market presence, potentially attracting a wider range of investors.

Despite the overall positive trajectory, Wise's shares experienced a dip following the release of its fiscal 2025 results. The market's reaction was partly attributed to the company's projection of a 15-20% growth in underlying income for fiscal 2026, which represents a deceleration compared to the 31% growth observed in fiscal 2024.

While some analysts view the company's pricing strategy as a strategic move to gain market share, others express caution regarding the potential impact on profit margins. This divergence in analyst sentiment highlights the complexities and uncertainties inherent in assessing Wise's future financial performance.

The analyst upgrade by Rothschild & Co Redburn has injected renewed optimism into Wise shares, driven by expectations of sustained earnings growth. While the company faces challenges and uncertainties, its strong financial performance, strategic investments, and ambitious growth plans position it as a compelling player in the global money transfer market, and that outlook has the potential to drive positive sentiment.