Affirm (AFRM) is positioned for a potential fiscal Q4 2026 gross merchandise volume beat, but management could issue a conservative fiscal 2027 outlook due to Prime Day timing, Morgan Stanley said in a note Wednesday.

The investment firm said Bloomberg observed-sales data indicate Affirm's fiscal Q4 GMV growth could be close to 34%, above consensus of about 29%, while investors are increasingly focused on potential spending softness in August following strong July activity.

For fiscal Q1 and fiscal 2027, investors seem to expect initial GMV growth guidance of about 27%, below consensus estimates of 28.5% and 29%, respectively, with the absence of a Prime Day event in fiscal Q1 likely resulting in a potential 3- to 4-percentage-point drag from the prior year, according to the note.

The firm said it remained confident in Affirm's underlying business, citing its Amazon (AMZN) and Shopify (SHOP) distribution, broad product offering and execution.

Morgan Stanley maintained its equal-weight rating on Affirm and raised its price target to $80 from $79.

Affirm shares were down 1.5% in Wednesday trading.

Price: 76.78, Change: -1.16, Percent Change: -1.49