By Sam Boughedda
UBS analysts raised the firm's price target on PayPal (NASDAQ:PYPL) to $129 from $125 in a research note, stating they believe the market is not pricing in potential PayPal growth.
The analysts, who have a Buy rating on the stock, said they see a solid entry point for the shares.
"From 2022 to 2026E, we believe PayPal can generate a 10% revenue CAGR fueled by 10% total payment volume (TPV) growth and 14% Other Value-added Services ("OVAS") revenue gains based on our interactive model," the analysts wrote.
They added that "low-double-digit top-line gains when combined with ~100 basis points annual margin expansion should drive EPS growth in the high-teens."
"With PayPal trading at ~14x our '23E EPS, the market does not appear to price-in this growth, providing a solid entry point for the shares, in our view," they continued.
Elsewhere Monday, Wells Fargo analysts said in a note that the firm's analysis shows PYPL's branded checkout is gaining share in its core markets of the U.S., U.K., and EU.
"We dove into PYPL's disclosures on its branded checkout volumes, and also higher-level e-com volume data in PYPL's three core markets: the U.S., U.K. and EU," explained the analysts, who have an Overweight rating and $97 price target on the stock.
"We find PYPL's branded checkout volumes have outgrown aggregate e-com sales in these three core markets consistently since 2019; the 'spread' (branded growth minus core mkt growth) on an annual basis ranges between 3%-7%," they added. "Based on our analysis, PYPL gained 50bps of share last year in its core markets."