Seamless Distribution AB, a Swedish maker of payment solutions for mobile phones, surged to a record price in Stockholm trading after Berenberg Bank said the company’s shares may quadruple in value amid earnings growth.
The shares soared as much as 54 percent to 41 kronor, the highest price since the shares were listed in 2006 and the steepest intraday advance since Aug. 2011. The stock rose 33 percent to 35.4 kronor as of 10:40 a.m. Swedish time, with trading volume at more than 14 times the daily average in the past three months and valuing the Stockholm-based software maker at 1.17 billion kronor ($181.2 million).
Berenberg today started coverage of Seamless shares with a buy rating and a share-price estimate of 112 kronor -- more than four times yesterday’s closing price of 26.7 kronor. The Swedish company’s mobile payment services, including the SEQR software, “could bring about a tectonic shift in the payment ecosystem,” the bank said. Mobile payment transactions are estimated to reach $700 billion by 2017, Berenberg said.
“Given the large addressable market, the strong appeal of the product, ease of roll-out and the low marginal cost of operations, Seamless can achieve explosive growth in earnings if it achieves a relatively modest penetration of its addressable market,” Ali Farid Khwaja, an analyst at Berenberg in London, wrote in a note to clients.
The company is “a very attractive acquisition target and will become even more so if it can successfully roll out its product in key markets like the U.K. and the U.S.,” he said.