Payments giant PayPal (PYPL) will be expected to outline more details of its future M&A strategy at its investor day tomorrow.
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Tuck-In or Tuck-Out?
Four-star TipRanks-rated analyst Bryan Bergin of TD Cowen, who has a Hold rating on the stock and a $125 price target, declared that news of “modest dispositions” would be cheered by the Street. “Portfolio pruning has been minimal to date. Dispositions would signal sharper focus,” he said. “At the same time, does it envision tuck-in opportunities to enhance its core solutions?” Bergin said he would also like to hear more from PayPal chief executive Alex Chriss about whether PYPL will enact a dividend. “It’s probably time for this,” he stated. “Financial flexibility is ample and it may bring incremental investors into the fold.”
Another topic that should keep investors’ attention away from the sandwiches and refreshments will be the performance of PayPal Braintree—its payment processing service for businesses. “When does Braintree volume trough and how quickly does it reaccelerate?” Bergin pondered. He would also like to see a medium-term outlook from the group. “Too soft and structural questions persist. An aggressive approach may signal confidence but will likely catch Street skepticism out of the gate,” he said. “In addition, what are the building blocks to sustain eCommerce market share?”
PYPL Has Some Concerns
PYPL shares were up slightly in pre-market trading. Since Chriss joined the group in late 2023 PayPal’s stock has climbed by nearly 30%. Year to date, however, it is down 12%. This is largely down to concerns over growth at its branded checkout service and competition from rivals such as Apple’s (AAPL) product Apple Pay.
Is PYPL a Good Stock to Buy?
On TipRanks, PYPL has a Moderate Buy consensus based on 16 Buy and 13 Hold ratings. Its highest price target is $125. PYPL stock’s consensus price target is $96.84 implying an 29.21% upside.
