Feb 6 - RBC Capital Markets boosts its outlook on PayPal (PYPL, Financial) by raising the price target from $100 to $104 while holding a steady Outperform rating. Analyst Daniel Perlin highlights the company's ongoing transition as market anticipation builds for the upcoming Investor Day on February 25 in New York City. Although PayPal's quarterly results beat expectations, a modest sequential gain in Branded Checkout Total Payment Volume raises questions about the company's market share dynamics amid steady overall e-commerce growth. According to InvestingPro, PayPal's market cap sits at $78.21 billion, and the firm appears undervalued based on its Fair Value analysis, with earnings estimates revised upward by 10 analysts.
Perlin points out that U.S. Branded TPV accelerated by roughly 300 basis points, while International TPV slowed by under 100 basis points. With U.S. and International segments weighing 40% and 60%, respectively, the overall gain of only about 50 basis points falls short of signaling robust momentum. Nonetheless, PayPal maintains solid fundamentals with a 40.54% gross profit margin and 6.81% revenue growth over the past twelve months, supported by a P/E ratio of 19.57 and a “GOOD” Financial Health score. Investors now focus on management's strategy to leverage this strong financial position for future growth.
