North America Equity Research: Square, 25 March 2020
Summary
This is a North America Equity Research report from J.P. Morgan dated 25 March 2020 on Square (SQ), rated Overweight, titled Investor Update Confirms SMB Pressure, But SQ Can Weather the Storm. It cuts the Dec-20 price target to $57.00 (from $86.00) and cuts the 2020 and 2021 EPS estimates to $0.65 (from $0.88) and $0.92 (from $1.36). The report says 1Q revenue guidance was cut 2%, FY20 guidance was withdrawn, and Cash App (24% of net revenue) is holding up much better than the Seller business. It also likes an idea floated by Womply to allow payment companies like Square to deliver gov't stimulus directly to SMBs.
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“North America Equity Research: Square, 25 March 2020.”
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North America Equity Research
25 March 2020
Overweight
Square SQ, SQ US
Price (24 Mar 20): $46.31
Investor Update Confirms SMB Pressure, But SQ
▼ Price Target (Dec-20): $57.00
Can Weather the Storm; Cutting Est, PT; Stay OW Prior (Dec-20): $86.00
Square’s investor update call struck the right tone on the unprecedented Payments, Processors & IT Services
uncertainty created by COVID-19, balancing the interests of clients, shareholders Tien-tsin Huang, CFA AC
and employees alike. SQ was tracking a couple points ahead of plan on both (1-212) 622-6632
ecosystems through early March when it successfully raised $1B via a convert, tien-tsin.huang@jpmorgan.com
then the virus impact started and accelerated such that the last 10-days saw a 45- Bloomberg JPMA HUANG <GO>
point swing in Seller volume to -25%. 1Q revenue guidance was cut 2%, and FY20 Reginald L. Smith, CFA
(1-212) 622-6743
guidance was unsurprisingly withdrawn. While Seller business is under pressure,
reginald.l.smith@jpmorgan.com
Cash App (24% of net revenue) is holding up much better as a diversification
Andrew D Polkowitz
hedge, and should benefit from pending fiscal stimulus. Again, SQ is well
(1-212) 622-1219
capitalized to outlast the virus as we previewed, and we like that SQ has levers to andrew.polkowitz@jpmorgan.com
protect the bottom line and is hustling to better serve sellers (e.g. curbside pickup J.P. Morgan Securities LLC
and delivery releases). We’re cutting estimates and maintaining our OW assuming
shares will gradually appreciate as investors gain more visibility into the longer- Key Changes (FYE Dec)
term impact of COVID-19 as SQ adapts, resulting in a new PT of $57 (from $86). Prev Cur
Adj. EPS - 20E ($) 0.88 0.65
Guidance/JPMe Update Summary: Our ‘20 and ‘21 SQ EPS estimates go to Adj. EPS - 21E ($) 1.36 0.92
Revenue - 20E ($ mn) 5,962 4,785
$0.65 (from $0.88) and $0.92 (from $1.36), respectively, on 2% (from 26%) and Revenue - 21E ($ mn) 7,265 5,535
16% (from 22%) total revenue growth, respectively. We now see a 10% GPV
decline (from +22%) in ’20. Quarterly Forecasts (FYE Dec)
Adj. EPS ($)
Updated 1Q20 Prior 1Q20 2019A 2020E 2021E
Q1 0.11 0.12 0.25
Total Net Revenues ($mm)
Q2 0.21 0.10 0.20
Guidance $1,300-$1,340 $1,340-$1,360 Q3 0.25 0.19 0.21
JPMe $1,319 $1,351 Q4 0.23 0.26 0.26
FY 0.80 0.65 0.92
Gross Profit ($mm)
Guidance $515-$525 $550-$560 Style Exposure
JPMe $522 $552 Current Hist %Rank (1=Top)
Quant
Source: Company reports, J.P. Morgan estimates. Factors %Rank 6M 1Y 3Y 5Y
Value 80 82 88 93
Protecting the Seller, Defending the Earnings. Management has been re-
Growth 18 25 43 73
prioritizing roadmap items and cutting fees and adding features to help clients
Momentum 65 80 25 10
through the storm. SQ is expediting the launch of Seller-friendly, omnichannel
Quality 8 63 52 73 71
offerings (detailed herein), while refunding March software subscriptions. Speed
Low Vol 76 79 85 82
to market is a huge advantage, and we believe these initiatives are building
ESGQ 36 21 83 - -
goodwill that SQ could capitalize on in the recovery. SQ confirmed it has
expense levers at its disposal (discretionary expenses ~50% of '19 Op. Ex.) and
is adjusting loan origination requirements to minimize Square Capital risk.
TAM Update. Square sees a $100bn market opportunity (SQ <3% penetrated)
for the Seller ecosystem. The Cash App ecosystem offers a $60bn revenue
opportunity (<2% penetrated) in the U.S. across sending, spending, and
investing of funds. Square cited record Cash App first time user growth over the
past week.
Sources for: Style Exposure – J.P. Morgan Quantitative and Derivatives Strategy; all other tables are company data and J.P. Morgan estimates.
See page 7 for analyst certification and important disclosures.
J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that
the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single
factor in making their investment decision.
www.jpmorganmarkets.com
Tien-tsin Huang, CFA North America Equity Research
(1-212) 622-6632 25 March 2020
tien-tsin.huang@jpmorgan.com
Price Performance Summary Investment Thesis and Valuation
Investment Thesis
Square pioneered micro-merchant card acceptance, much like
PayPal did for online payments and led the revolution to
modernize software-based POS. Prior to Square, micro and
casual merchants rarely accepted in-person card-based
payments as mobile terminals offered by traditional POS
technology providers were too costly, and banks were
generally unwilling to underwrite merchant bank accounts for
casual sellers. In just 10 years, Square has grown to ~$100bn
YTD 1m 3m 12m in annualized card volume, serving nearly 3 million active
Abs -26.0% -42.3% -27.6% 15.7% sellers. It has also developed one of the largest Fintechs in
Rel 8.3% -9.7% 7.1% 6.3% Cash App to complement its seller business. We rate shares
Company Data
Overweight given Square’s large and untapped addressable
market, unique growth characteristics, and an equally unique
Shares O/S (mn) 498
52-week range ($) 87.25-32.33
mission and corporate culture, which, in our view, justify its
Market cap ($ mn) 23,062.38 premium valuation.
Exchange rate 1.00
Free float(%) 99.0%
3M - Avg daily vol (mn) 11.28
Valuation
3M - Avg daily val ($ mn) 747.6 We are reducing our Dec ’20 price target to $57 (from $86) on
Volatility (90 Day) 85 lower estimates. Our new price target applies a 50x target
Index RUSSELL 2000
BBG BUY|HOLD|SELL 22|18|2 EV/EBITDA multiple, in line with its average over the past
three years. We think shares will appreciate from current
Key Metrics (FYE Dec) levels as investors get more visibility into the longer-term
$ in millions FY19A FY20E FY21E impact of COVID-19 on Square’s SMB merchant base.
Financial Estimates
Revenue 2,267 4,785 5,535
Adj. EBIT 341 322 457 Performance Drivers
Adj. EBITDA 417 405 540
Adj. net income 388 318 453
Adj. EPS 0.80 0.65 0.92
BBG EPS 0.78 0.87 1.26
Cashflow from operations 466 751 919
FCFF 350 330 833
Margins and Growth
Revenue growth 44.0% 111.0% 15.7%
EBIT margin 15.0% 6.7% 8.2%
EBIT growth 79.9% (5.5%) 41.7%
EBITDA margin 18.4% 8.5% 9.7%
EBITDA growth 66.3% (2.7%) 33.1%
Net margin 17.1% 6.7% 8.2%
Adj. EPS growth 68.2% (18.0%) 41.0%
Ratios
Adj. tax rate 0.0% 0.0% 0.0%
Interest cover - - -
Net debt/Equity NM NM NM
Net debt/EBITDA NM NM NM
ROE 27.4% 17.1% 20.5%
Valuation
FCFF yield 1.6% 1.5% 3.7%
Dividend yield - - -
EV/EBITDA 53.9 54.7 40.4
Adj. P/E 58.0 70.7 50.1
Source: J.P. Morgan Quantitative and Derivatives Strategy for Performance Drivers; company data, Bloomberg and J.P. Morgan estimates for all other tables.
2
Tien-tsin Huang, CFA North America Equity Research
(1-212) 622-6632 25 March 2020
tien-tsin.huang@jpmorgan.com
1Q20 Expectations Summary
Company Guidance
Based on the observed impacts to business brought upon by the COVID-19 crisis,
Square lowered its net revenue and gross profit guidance. Net revenue guidance now
is $1.30bn-$1.34bn (-2% revision at the midpoint), and gross profit guidance is
$515mm-$525mm (-6% at the midpoint).
The revisions are largely driven by a 25% y/y drop in Seller GPV over a trailing ten-
day period, which we note is decelerating further as we head into 2Q. Also worth
calling out, the stated 25% is a blend Square’s overall Seller base. Rates of
deceleration vary by geography and vertical, but are most pronounced in New York,
San Francisco, and Seattle (~45%). This is directionally consistent with the
datapoints we’ve been tracking among small businesses.
COVID-19 impact has been less pronounced in the Cash App ecosystem, and gross
profit has actually been running closer to targets with degradation in Cash Card.
JPM Estimate Updates
Our ‘20 and ‘21 SQ EPS estimates go to $0.65 (from $0.88) and $0.92 (from $1.36),
respectively, on 2% (from 26%) and 16% (from 22%) total revenue growth,
respectively. We now see a 10% GPV decline (from +22%) in ’20.
Tidbits From Investor Call
Square Doing Its Part to Aid SMBs in Crisis
Speed to market is an advantage for SQ versus legacy players, evidenced by (1)
recent release of curbside pickup (waving pickup & delivery fees for next 3 months),
and a local delivery feature is pending to help sellers quickly adapt to limit in-person
contact; (2) free online set up to promote digital gift cards to help drive cash flow; (3)
refunding all software subscription fees (Appointments, Retail, Restaurants, Payroll,
etc.) for the month of March; (4) customized emails to communicate with customers;
(5) resources for sellers to connect with peers including webinars and best practice
sharing. We believe these actions should reinforce the brand and build up goodwill
for current and prospective sellers for payback when the economy recovers. We also
like the idea floated by Womply (privately held software transaction/reputation data
firm for SMBs) to allow payment companies like Square to deliver gov’t stimulus
directly to SMBs (think Square Capital funded by gov’t via Square) as an example of
something SQ could do at scale to aid SMBs.
Square Capital Appetite More Selective
Square recognizes sellers are in need to improve cash flow, and Square Capital can
help, but given increased volatility we should expect the company to scale back on
originations. Not surprisingly, Square has provided payment relief on existing loans
(so we don’t expect charge-offs to pick up materially in 2Q), and will
increase/tighten loan requirements and credit standards for the time being, but we
expect them to loosen these standards once things improve. Says relationships with
investors are healthy on the funding side. Recall that Square had about $165M in
loans held for sale on the balance sheet at the end of 2019.
3
Tien-tsin Huang, CFA North America Equity Research
(1-212) 622-6632 25 March 2020
tien-tsin.huang@jpmorgan.com
Flexibility to Protect Bottom Line
On the call, management confirmed they will be pulling back previously planned
investments where they do not expect immediate returns, although savings will be
partially offset by the expedited launches of several omnichannel, seller-friendly
initiatives referenced above (see Square Doing Its Part… section). On the cost side,
management provided some color around its $1.5bn Op Ex base: ~50% discretionary
spending across both ecosystems; ~20% related to customer acquisition and go to
market spend; ~30% related to corporate overhead (including headcount).
Discretionary spending will be the biggest source of cost savings, and we would
expect M&A activity (and as a result related expenses) to slow until greater market
stability prevails.
Well Capitalized
Square just raised $1B in a convertible note offering earlier this month providing the
liquidity to not just weather this storm, but also invest in the recovery. Further,
Square says it will maintain an asset light model for Square Capital and continue to
sell loans to 3rd party investors. Recall that at the end of CY19, Square had ~$2B in
cash, cash equivalents and investments in marketable debt securities.
TAM Update
Square sees a $100bn market opportunity for the Seller ecosystem, including $85bn
in the U.S. with plans to implement new products and use cases and the longer terms
goals of selling further upmarket and expanding into new geographies. The Cash
App ecosystem offers a $60bn revenue opportunity in the U.S. across sending,
spending, and investing of funds. In a post-social distancing world, we see this
opportunity continuing to expand, and Square has already hinted at as much, citing
record Cash App first time user growth over the past week. Square still has a long
growth runway as it claims <3% and <2% share in the Seller and Cash App verticals,
respectively.
4
Tien-tsin Huang, CFA North America Equity Research
(1-212) 622-6632 25 March 2020
tien-tsin.huang@jpmorgan.com
Investment Thesis, Valuation and Risks
Square, Inc. (Overweight; Price Target: $57.00)
Investment Thesis
Square pioneered micro-merchant card acceptance in 2009, much like PayPal did for
online payment 16 years ago, and has evolved to be the scale leader in the popular
software-based POS revolution. Prior to Square, micro and casual merchants rarely
accepted in-person card-based payments, as mobile terminals offered by traditional
POS technology providers were too costly, and banks were generally unwilling to
underwrite merchant bank accounts for casual sellers. In just 10 years, Square has
grown to ~$100bn in annualized card volume, serving nearly 3 million active sellers.
It has also developed one of the largest consumer Fintechs in the U.S. known as Cash
App with over 15M users. We rate shares Overweight given Square’s large and
untapped addressable market, unique growth characteristics, and an equally unique
mission and corporate culture, which, in our view, justify its premium valuation.
Valuation
We are reducing our Dec ’20 price target to $57 (from $86) on lower estimates. Our
new price target applies a 50x target EV/EBITDA multiple, in line with its average
over the past three years. We think shares will appreciate from current levels as
investors get more visibility into the longer-term impact of COVID-19 on Square’s
SMB merchant base.
Risks to Rating and Price Target
Macroeconomic slowdown, especially in the SMB space where SQ is focused,
and COVID-19 macro shock could place undue pressure on SMB sales volume
and/or cause a spike in bankruptcies and pressure SQ’s core revenue;
Slower adoption/lower attachment rates of Square’s value-added services, which
represent a key part of the growth story;
Downturn in the small business credit cycle or the inability to fund merchant cash
advances, which would harm growth and profitability;
Net margin compression due to increased competition or pricing pressure at the
hands of larger SMBs;
Square is focused on growth and scale, rather than maximizing profitability in the
near term, which could turn off investors;
Key man risk—CEO and co-founder Jack Dorsey is the visionary that drives the
unique culture at Square and has helped attract key talent to the firm.
5
Tien-tsin Huang, CFA North America Equity Research
(1-212) 622-6632 25 March 2020
tien-tsin.huang@jpmorgan.com
Square: Summary of Financials
Income Statement - Annual FY18A FY19A FY20E FY21E FY22E Income Statement - Quarterly 1Q20E 2Q20E 3Q20E 4Q20E
Revenue 1,575 2,267 4,785 5,535 - Revenue 1,319 1,009 1,181 1,276
COGS - - - - - COGS - - - -
Gross profit - - - - - Gross profit - - - -
SG&A - - - - - SG&A - - - -
Adj. EBITDA 251 417 405 540 - Adj. EBITDA 78 69 113 146
D&A (61) (76) (83) (83) - D&A (20) (21) (21) (21)
Adj. EBIT 190 341 322 457 - Adj. EBIT 58 48 92 125
Net Interest - - - - - Net Interest - - - -
Adj. PBT 190 319 318 453 - Adj. PBT 57 47 91 124
Tax 0 0 0 0 - Tax 0 0 0 0
Minority Interest - - - - - Minority Interest - - - -
Adj. Net Income 226 388 318 453 - Adj. Net Income 57 47 91 124
Reported EPS 0.47 0.80 0.65 0.92 - Reported EPS 0.12 0.10 0.19 0.26
Adj. EPS 0.47 0.80 0.65 0.92 - Adj. EPS 0.12 0.10 0.19 0.26
DPS - - - - - DPS - - - -
Payout ratio - - - - - Payout ratio - - - -
Shares outstanding 475 486 486 490 - Shares outstanding 486 486 486 486
Balance Sheet & Cash Flow Statement FY18A FY19A FY20E FY21E FY22E Ratio Analysis FY18A FY19A FY20E FY21E FY22E
Cash and cash equivalents 1,124 1,540 2,839 3,189 - Gross margin - - - - -
Accounts receivable - - - - - EBITDA margin 15.9% 18.4% 8.5% 9.7% -
Inventories - - - - - EBIT margin 12.0% 15.0% 6.7% 8.2% -
Other current assets 988 1,680 1,466 1,718 - Net profit margin 14.3% 17.1% 6.7% 8.2% -
Current assets 2,112 3,220 4,305 4,907 -
PP&E 142 149 141 144 - ROE 23.7% 27.4% 17.1% 20.5% -
LT investments - - - - - ROA 8.3% 9.9% 6.3% 7.6% -
Other non current assets 1,027 1,182 1,182 1,182 - ROCE 12.0% 14.6% 9.8% 11.0% -
Total assets 3,281 4,551 5,629 6,234 - SG&A/Sales - - - - -
Net debt/equity NM NM NM NM -
Short term borrowings - - - - -
Payables - - - - - P/E (x) 97.6 58.0 70.7 50.1 -
Other short term liabilities 1,019 1,694 1,488 1,676 - P/BV (x) 19.6 13.1 11.3 9.4 -
Current liabilities 1,019 1,694 1,488 1,676 - EV/EBITDA (x) 91.2 53.9 54.7 40.4 -
Long-term debt 900 939 1,939 1,939 - Dividend Yield - - - - -
Other long term liabilities 242 203 203 203 -
Total liabilities 2,161 2,836 3,631 3,818 - Sales/Assets (x) 0.6 0.6 0.9 0.9 -
Shareholders' equity 1,121 1,715 1,998 2,416 - Interest cover (x) - - - - -
Minority interests - - - - - Operating leverage 143.9% 181.8% (5.0%) 265.7% -
Total liabilities & equity 3,281 4,551 5,629 6,234 -
BVPS 2.36 3.53 4.11 4.93 - Revenue y/y Growth 60.0% 44.0% 111.0% 15.7% -
y/y Growth 27.7% 49.6% 16.6% 19.9% - EBITDA y/y Growth 80.3% 66.3% (2.7%) 33.1% -
Net debt/(cash) (224) (601) (900) (1,250) - Tax rate 0.0% 0.0% 0.0% 0.0% -
Adj. Net Income y/y Growth 96.3% 72.1% (18.0%) 42.2% -
Cash flow from operating activities 295 466 751 919 - EPS y/y Growth 75.9% 68.2% (18.0%) 41.0% -
o/w Depreciation & amortization - - - - - DPS y/y Growth - - - - -
o/w Changes in working capital - - - - -
Cash flow from investing activities (906) 95 (75) (86) -
o/w Capital expenditure (61) (63) (75) (86) -
as % of sales 3.9% 2.8% 1.6% 1.6% -
Cash flow from financing activities 516 (99) 623 (483) -
o/w Dividends paid - - - - -
o/w Net debt issued/(repaid) - - - - -
Net change in cash (102) 466 1,300 350 -
Adj. Free cash flow to firm 187 350 330 833 -
y/y Growth 79.8% 86.9% (5.7%) 152.1% -
Source: Company reports and J.P. Morgan estimates.
Note: $ in millions (except per-share data).Fiscal year ends Dec. o/w - out of which
6
Tien-tsin Huang, CFA North America Equity Research
(1-212) 622-6632 25 March 2020
tien-tsin.huang@jpmorgan.com
Analyst Certification: The research analyst(s) denoted by an “AC” on the cover of this report certifies (or, where multiple research
analysts are primarily responsible for this report, the research analyst denoted by an “AC” on the cover or within the document
individually certifies, with respect to each security or issuer that the research analyst covers in this research) that: (1) all of the views
expressed in this report accurately reflect the research analyst’s personal views about any and all of the subject securities or issuers; and
(2) no part of any of the research analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations
or views expressed by the research analyst(s) in this report. For all Korea-based research analysts listed on the front cover, if applicable,
they also certify, as per KOFIA requirements, that their analysis was made in good faith and that the views reflect their own opinion,
without undue influence or intervention.
All authors named within this report are research analysts unless otherwise specified. In Europe, Sector Specialists may be shown on this
report as contacts but are not authors of the report or part of the Research Department.
Important Disclosures
Market Maker/ Liquidity Provider: J.P. Morgan is a market maker and/or liquidity provider in the financial instruments of/related to
Square.
Analyst Position: The covering analyst, member of the coverage team or a member of their respective household(s) has a financial
interest in the debt or equity securities of Square.
Client: J.P. Morgan currently has, or had within the past 12 months, the following entity(ies) as clients: Square.
Client/Investment Banking: J.P. Morgan currently has, or had within the past 12 months, the following entity(ies) as investment
banking clients: Square.
Client/Non-Investment Banking, Securities-Related: J.P. Morgan currently has, or had within the past 12 months, the following
entity(ies) as clients, and the services provided were non-investment-banking, securities-related: Square.
Client/Non-Securities-Related: J.P. Morgan currently has, or had within the past 12 months, the following entity(ies) as clients, and
the services provided were non-securities-related: Square.
Investment Banking (past 12 months): J.P. Morgan received in the past 12 months compensation for investment banking services
from Square.
Investment Banking (next 3 months): J.P. Morgan expects to receive, or intends to seek, compensation for investment banking
services in the next three months from Square.
Non-Investment Banking Compensation: J.P. Morgan has received compensation in the past 12 months for products or services
other than investment banking from Square.
Debt Position: J.P. Morgan may hold a position in the debt securities of Square, if any.
Company-Specific Disclosures: Important disclosures, including price charts and credit opinion history tables, are available for
compendium reports and all J.P. Morgan–covered companies by visiting https://www.jpmm.com/research/disclosures, calling 1-800-477-
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Research teams may screen companies not covered by J.P. Morgan. For important disclosures for these companies, please call 1-800-477-
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7
Tien-tsin Huang, CFA North America Equity Research
(1-212) 622-6632 25 March 2020
tien-tsin.huang@jpmorgan.com
Square (SQ, SQ US) Price Chart Date Rating Price ($) Price Target
($)
04-May-17 OW 18.28 20
OW $29 OW $46 OW $85 OW $86 03-Aug-17 OW 26.46 25
150
17-Aug-17 OW 24.99 29
OW $25 OW $45 OW $60 OW $75 09-Nov-17 OW 36.71 33
120 12-Dec-17 OW 38.30 45
OW $20 OW $33 OW $51 OW $86 OW $87 28-Feb-18 OW 45.91 46
Price($) 90
03-May-18 OW 48.66 51
01-Aug-18 OW 64.65 60
14-Aug-18 OW 72.37 85
60
07-Nov-18 OW 77.31 86
15-Aug-19 OW 61.55 87
30
07-Nov-19 OW 61.34 75
27-Feb-20 OW 76.59 86
0
Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar
17 17 17 17 18 18 18 18 19 19 19 19 20
Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.
Initiated coverage Dec 14, 2015. All share prices are as of market close on the previous business day.
The chart(s) show J.P. Morgan's continuing coverage of the stocks; the current analysts may or may not have covered it over the entire
period.
J.P. Morgan ratings or designations: OW = Overweight, N= Neutral, UW = Underweight, NR = Not Rated
Explanation of Equity Research Ratings, Designations and Analyst(s) Coverage Universe:
J.P. Morgan uses the following rating system: Overweight [Over the next six to twelve months, we expect this stock will outperform the
average total return of the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] Neutral [Over the next six to twelve
months, we expect this stock will perform in line with the average total return of the stocks in the analyst’s (or the analyst’s team’s)
coverage universe.] Underweight [Over the next six to twelve months, we expect this stock will underperform the average total return of
the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] Not Rated (NR): J.P. Morgan has removed the rating and, if
applicable, the price target, for this stock because of either a lack of a sufficient fundamental basis or for legal, regulatory or policy
reasons. The previous rating and, if applicable, the price target, no longer should be relied upon. An NR designation is not a
recommendation or a rating. In our Asia (ex-Australia and ex-India) and U.K. small- and mid-cap equity research, each stock’s expected
total return is compared to the expected total return of a benchmark country market index, not to those analysts’ coverage universe. If it
does not appear in the Important Disclosures section of this report, the certifying analyst’s coverage universe can be found on J.P.
Morgan’s research website, www.jpmorganmarkets.com.
Coverage Universe: Huang, Tien-tsin: Accenture plc (ACN), Automatic Data Processing (ADP), Black Knight Inc (BKI), Cognizant
(CTSH), DXC (DXC), EVO Payments (EVOP), FIS (FIS), Fiserv, Inc. (FISV), FleetCor (FLT), Genpact (G), Global Payments (GPN),
Globant (GLOB), Green Dot (GDOT), GreenSky (GSKY), IBM (IBM), Lightspeed POS (LSPD.TO), Mastercard (MA), MoneyGram
(MGI), PayPal (PYPL), Paychex Inc (PAYX), Square (SQ), TriNet (TNET), Visa Inc. (V), WEX Inc. (WEX), Western Union (WU)
J.P. Morgan Equity Research Ratings Distribution, as of January 02, 2020
Overweight Neutral Underweight
(buy) (hold) (sell)
J.P. Morgan Global Equity Research Coverage 45% 41% 15%
IB clients* 51% 47% 39%
JPMS Equity Research Coverage 43% 42% 14%
IB clients* 75% 64% 56%
*Percentage of subject companies within each of the "buy," "hold" and "sell" categories for which J.P. Morgan has provided investment banking services
within the previous 12 months. Please note that the percentages might not add to 100% because of rounding.
For purposes only of FINRA ratings distribution rules, our Overweight rating falls into a buy rating category; our Neutral rating falls into a hold rating
category; and our Underweight rating falls into a sell rating category. Please note that stocks with an NR designation are not included in the table above.
This information is current as of the end of the most recent calendar quarter.
Equity Valuation and Risks: For valuation methodology and risks associated with covered companies or price targets for covered
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8
Tien-tsin Huang, CFA North America Equity Research
(1-212) 622-6632 25 March 2020
tien-tsin.huang@jpmorgan.com
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Tien-tsin Huang, CFA North America Equity Research
(1-212) 622-6632 25 March 2020
tien-tsin.huang@jpmorgan.com
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10
Tien-tsin Huang, CFA North America Equity Research
(1-212) 622-6632 25 March 2020
tien-tsin.huang@jpmorgan.com
"Other Disclosures" last revised March 08, 2020.
Copyright 2020 JPMorgan Chase & Co. All rights reserved. This report or any portion hereof may not be reprinted, sold or
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11
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