PayPal stock could gain 30% this year: Truist

By:
on Jan 3, 2023
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  • Truist upgrades PayPal stock to "buy" with upside to $95.
  • Analyst Andrew Jeffrey explains his bullish view in a note.
  • PayPal shares are down nearly 30% versus their August high.

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PayPal Holdings Inc (NASDAQ: PYPL) is trading up this morning after a Truist analyst issued a bullish note in favour of the payments technology company.

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PayPal stock should be worth $95

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On Tuesday, Andrew Jeffrey recommended that investors buy PayPal stock following the sell-off over the past five months. His raised price target of $95 a share represents about a 30% upside from here.

Dan Schulman – the current Chief Executive of PayPal is turning 65 later this month. So, this fintech, the analyst wrote, could opt for new leadership this year that he expects to be a positive catalyst for its stock price.  

A new CEO would be positioned to build on Mr Schulman’s success, while also wielding a freer M&A hand, perhaps moving the company into card present acquiring, expanding its TAM and boosting terminal revenue/EPS growth.

In December, PayPal partnered with MetaMask to allow seamless purchase of cryptocurrencies (source).

PayPal has enough cash on its balance sheet

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At writing, PayPal has roughly $6.0 billion in net cash – sufficient to support the potential M&A activity and share repurchase, Jeffrey added.

The Truist analyst expects this multinational to earn more than expected on a per-share basis this year and is convinced that there’s hardly a downside risk in the Street’s current revenue estimates either. The note also reads:

Although current macro challenges eCommerce volume/revenue growth, we contend that eCommerce will take share from card present.

The California-based company is set to report its current quarter results next month. Consensus is for it to earn 97 cents a share versus 92 cents a year ago. Versus its high in mid-August, PayPal stock is currently down nearly 30%.

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