Shift4 Payments (FOUR) showed healthy overall volume growth, though recent headwinds and lower-than-expected contributions from Global Blue and parts of recent acquisitions prompted Morgan Stanley to trim estimates, the firm said Friday in a research note.

The bank cut its Q3 net revenue estimate to $578 million from $596.6 million and lowered its quarterly Global Blue contribution to $157 million from $165 million for Q3 and $158 million from $165 million for Q4, citing softer luxury travel to Japan, the note said.

Morgan Stanley also pared its Q3 and Q4 adjusted earnings before interest, taxes, depreciation, and amortization forecasts to $286 million and $304 million from $291 million and $308 million, modeled slightly slower volume growth and narrower spreads, reduced cash interest expense, and raised its assumed tax rate for the back half of the year to 25% from 17%.

The firm expects core restaurant same-store trends to remain slightly weak while hotel trends are flat to slightly up, and noted it has not seen a material slowdown in deal activity or client onboardings.

Still, Morgan Stanley said it needs to "see execution across key initiatives," including cross-sell with Global Blue and synergy realization from recent acquisitions Revel, Givex, and Eigen, to rebuild conviction in Shift4's medium-term outlook.

Morgan Stanley cut its price target to $86 from $92 and maintained its equal-weight rating on the stock.

Shares of Shift4 Payments were down 1.5% in recent trading.

(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)

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