Worldline: We Are Relaunching Coverage and Reiterate Our Narrow Moat Rating

We are relaunching coverage of European payment services provider Worldline with a fair value estimate of EUR 28.9 per share. The fintech has seen its valuation more than halved since it announced an unexpectedly sharp deceleration of growth in Germany in the third quarter. Moreover, the German regulator, BaFin, is investigating Worldline for insufficient risk and anti-money-laundering processes at its German subsidiary, Payone, although we believe this is largely unrelated to the growth performance in Germany to date. After taking a close look at the potential implications, we reiterate our narrow economic moat rating. However, we do increase our Uncertainty Rating to Very High from High, reflecting the greater volatility and risks investors may face going forward.