On Wednesday, RBC Capital Markets increased PayPal’s (NASDAQ:PYPL) price target from $100 to $104 while maintaining an Outperform rating on the shares. The firm’s analyst, Daniel Perlin, noted the company’s ongoing transition and market anticipation for the upcoming Investor Day. Despite PayPal’s quarterly results surpassing expectations, there was a lack of sequential acceleration in Branded Checkout Total (EPA:TTEF) Payment Volume (TPV) in line with overall e-commerce volumes, which raised concerns among investors about PayPal’s market share dynamics. According to InvestingPro data, PayPal, currently valued at $78.21 billion by market cap, appears undervalued based on its Fair Value analysis, with 10 analysts recently revising their earnings estimates upward.
Perlin observed that while US Branded TPV saw an approximate 300 basis points acceleration, International TPV experienced a slight deceleration of less than 100 basis points. Considering the respective weights of US and International TPV (40% and 60%), the overall Branded TPV only accelerated by approximately 50 basis points. This marginal increase did not meet the threshold to signify a notable change. The company maintains solid fundamentals with a 40.54% gross profit margin and 6.81% revenue growth over the last twelve months, as reported by InvestingPro.
The analyst’s comments come ahead of PayPal’s Investor Day, scheduled for February 25th in New York City. This event is expected to provide further insights into the company’s strategic initiatives and performance metrics. With a P/E ratio of 19.57 and a "GOOD" Financial Health score from InvestingPro, investors will be particularly interested in management’s plans to leverage the company’s strong financial position. InvestingPro subscribers can access the comprehensive Pro Research Report for deeper insights into PayPal’s valuation and growth prospects.
PayPal’s transition story has been a recurring theme in the company’s narrative, as it aims to adapt to the evolving digital payments landscape. The upcoming Investor Day is seen as a critical moment for PayPal to present its progress and future plans to investors.
RBC Capital Markets’ revised price target reflects a positive outlook on PayPal’s stock, despite the mixed signals from the recent TPV growth figures. Investors and analysts alike will be closely watching the developments at PayPal’s Investor Day for any indications of the company’s trajectory in the competitive digital payments market.
In other recent news, PayPal Holdings Inc . has been under the microscope of several analyst firms. Mizuho (NYSE:MFG) Securities revised its price target for PayPal from $100 to $96, maintaining an Outperform rating. The firm cited concerns about PayPal’s competitive edge, estimating a low single-digit percentage growth in its U.S. Branded Checkout. Despite these concerns, Mizuho remains optimistic about PayPal’s prospects, highlighting potential for upside if new products and services perform better than expected.
Citi analyst Ashwin Shirvaikar also adjusted the price target for PayPal, increasing it marginally from $97.00 to $98.00, while reiterating a Buy rating on the company’s shares. This adjustment comes despite a recent drop in PayPal’s stock following its fourth-quarter results. Shirvaikar suggests confidence in PayPal’s ability to meet and potentially exceed current market expectations.
BTIG analyst Lance Jessurun reaffirmed a Neutral rating on PayPal stock, expressing caution about the company’s growth outlook. Jessurun anticipates that the majority of PayPal’s pricing and margin improvement efforts will not materialize until the second half of 2025. Meanwhile, KeyBanc Capital Markets maintained a "Sector Weight" rating on PayPal, predicting a robust fourth-quarter performance but expressing caution regarding PayPal’s fiscal year 2025 transaction margin dollar growth guidance.
These are some of the recent developments involving PayPal as the company navigates an increasingly competitive digital payments landscape.
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