BMO Capital initiated coverage on Shopify (NASDAQ:SHOP) with an Outperform rating and a $120 price target, citing the e-commerce platform’s improving fundamentals and long-term growth potential following its strategic exit from logistics operations.

The firm noted that Shopify has demonstrated stronger growth and enhanced operating leverage in recent quarters, benefiting from its streamlined focus on core platform capabilities. BMO sees multiple avenues for continued expansion, driven by Shopify’s strong market positioning and the scalability of its merchant-focused ecosystem.

While acknowledging that tariffs pose a near-term headwind, the analysts argue that Shopify’s flexible platform gives merchants the tools to adapt quickly—an advantage that could translate into increased market share as competitors struggle with supply chain disruptions. BMO emphasized that Shopify’s agility in supporting merchants through economic shifts positions it well to outperform peers.