Do Wall Street Analysts Predict Paypal Stock Will Rise or Sink? — TradingView News

PayPal Holdings, Inc. based in San Jose PYPL is a global powerhouse in the field of digital payments. With a market capitalization of $67.4 billion, the fintech giant’s simple and secure platform has made it the ideal choice for online purchases, person-to-person transfers and business transactions worldwide. Its global reach now extends to over 200 countries, offering services in 25 currencies.

PayPal shares have underperformed the broader market over the past year. PYPL rose 4.9% over this time frame, while the broader S&P 500 index ($SPX) rallied nearly 27.5%. In 2024, while PayPal Holdings shares are up 5%, they still lag SPX’s 11.2% year-over-year returns.

Narrowing the focus, PYPL also underperformed the GX Fintech ETF FINX. The exchange traded fund has gained about 26.7% over the past year, easily dwarfing PYPL stock’s single-digit gain over the same period.

PayPal’s underperformance over the past year comes down to intense competition and changing dynamics in the digital payments space. Tech giants like Apple AAPL and Alphabet’s Google are encroaching on its territory, while other fintech players such as Adyen, Block m2and Stripe are gaining market share. Also, the breakup with former parent eBay EBAY and inflationary pressures have hampered PayPal’s growth momentum.

Despite this, Paypal shares rose after reporting strong first-quarter earnings results on April 30, where customer spending remained resilient, while cost cuts helped profitability. Additionally, the payments company raised its adjusted earnings guidance for fiscal 2024.

For the current fiscal year, which ends in December, analysts expect PYPL to report EPS growth of 9.3% year-over-year to $4.13. The company’s history of earnings surprises is mixed. It has beaten consensus estimates in three of the last four quarters, missing on one other occasion.

Despite some downgrades from last year, the prevailing sentiment on the PYPL has been bullish overall. Among the 41 analysts covering PYPL stock, the consensus rating is “Moderate Buy.” This is based on 14 “Strong Buy” ratings, three “Moderate Buy” and 24 “Hold.”

This pattern is slightly less bullish than two months earlier, with 15 analysts suggesting a “strong buy.”

On May 1, BMO Capital raised its price target for PayPal from $64 to $65, maintaining its “Market Perform” rating. The analyst sees modest upside in PayPal’s EPS guidance for 2024, but is cautious about significant gross profit growth. While PayPal’s new initiatives show success, upcoming Consumer Financial Protection Bureau (CFPB) regulations and the potential for increased investment spending pose risks.

The average price target of $73.84 indicates a 14.5% premium to PYPL’s current price levels. The $88 high price target suggests 36.5% upside potential.

As of the date of publication, Rashmi Kumari did not hold (either directly or indirectly) any positions in any of the securities mentioned in this article. All information and data contained in this article are for informational purposes only. For more information, please see Barchart’s Disclosure Policy here.

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