PayPal selloff after Q4 earnings ‘overdone,’ says BofA

BofA notes PayPal (PYPL) is trading down about 10% following Q4 earnings, but believes the selloff is “overdone.” The stock has suffered an “outsized reaction” due to investor expectations for branded total payment volume growth that had “simply become too high based on third-party data,” as well as some confusion about messaging on U.S. versus international branded trends/mix, the analyst tells investors. While the firm agrees with the sentiment that Q4 branded growth of 6% was “a little disappointing based on read-through data points on e-comm holiday spending,” the fact that year-over-year U.S. growth accelerated 3% “seemed to get lost in the shuffle,” adds the analyst, who maintains a $103 price target and Buy rating on PayPal shares.