{"id":69998,"date":"2023-10-07T18:31:27","date_gmt":"2023-10-07T22:31:27","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/paypals-stock-has-catalysts-aplenty-but-this-analyst-still-feels-cautious\/"},"modified":"2023-10-07T18:31:30","modified_gmt":"2023-10-07T22:31:30","slug":"paypals-stock-has-catalysts-aplenty-but-this-analyst-still-feels-cautious","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=69998","title":{"rendered":"PayPal\u2019s stock has \u2018catalysts aplenty\u2019 \u2014 but this analyst still feels cautious"},"content":{"rendered":"
\n

TD Cowen analyst Bryan Bergin sees \u201ccatalysts aplenty\u201d for PayPal Holdings Inc. \u2014 but he also sees the stock as a \u201cshow-me\u201d story, at least in the near term. <\/p>\n

Bergin initiated coverage of PayPal shares
\n PYPL,
\n +0.50%<\/bg-quote>
\n with a market-perform rating and $66 target price late Thursday, writing that while the company has shown some signs of recovery and has compelling capital-allocation potential, he still wants more clarity on PayPal\u2019s various uncertainties. <\/p>\n

\n

Among the unknowns? The company recently saw a new chief executive take over and potentially will bring on a new chief financial officer, plus the pace of its branded-checkout recovery is uncertain, as is the durability of discretionary e-commerce spending in this macroeconomic climate. <\/p>\n

Read:<\/strong> PayPal\u2019s \u2018fresh start\u2019 isn\u2019t enough to help its stock, analyst cautions<\/p>\n

\u201c[S]hares are materially pressured as macro & competitive uncertainties are
amplified,\u201d Bergin wrote. \u201cWell off post-pandemic highs, [PayPal] faces rising concerns of consumer weakening & macro volatility, competitive threats to its core with perceived e-comm share loss to competing checkout solutions, adverse profitability effect of mix shift (unbranded vs. branded), and a maturing financial profile.\u201d<\/p>\n

In Bergin\u2019s view, PayPal has \u201ccorrected course\u201d with its branded checkout offering over the past year, but the crucial piece now will be \u201cramping globally & driving usage while convincing Street its best days are not behind it.\u201d<\/p>\n

On the positive front, Bergin noted that PayPal\u2019s \u201cstrong financial position\u201d gives it ample room to deliver for investors when it comes to capital-allocation. \u201cWe expect
[free-cash-flow] conversion to improve exiting 2023, offering an even greater opportunity for an aggressive [share-repurchase] program,\u201d while the company could also establish a dividend, \u201cserving as a potential catalyst for shares.\u201d<\/p>\n

\u201cShares appear de-risked given stock price performance, yielding a deeply discounted valuation and estimates that reflect a more mature financial profile,\u201d and Bergin understands why some on Wall Street now see upside potential. Still, he\u2019s nervous about the impact of PayPal\u2019s unbranded Braintree business on margins, and he wants to see more proof that the higher-margin branded business is turning around. <\/p>\n

He was more upbeat about shares of Square parent Block Inc.
\n SQ,
\n +2.79%<\/bg-quote>,<\/span>
\n beginning coverage of that name with an outperform rating and $59 price target. <\/p>\n

Read: <\/strong>Block\u2019s stock has been a laggard lately. Will management shakeup provide a needed jolt?<\/p>\n

The company \u201cboasts a fundamentally differentiated ecosystem in Fintech and the ability to grow & integrate its solutions makes it among the most likely to challenge industry norms,\u201d he wrote. <\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

TD Cowen analyst Bryan Bergin sees \u201ccatalysts aplenty\u201d for PayPal Holdings Inc. \u2014 but he also sees the stock as a \u201cshow-me\u201d story, at least in the near term. Bergin initiated coverage of PayPal shares PYPL, +0.50% with a market-perform rating and $66 target price late Thursday, writing that while the company has shown some […]<\/p>\n","protected":false},"author":1,"featured_media":69999,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-69998","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nPayPal\u2019s stock has \u2018catalysts aplenty\u2019 \u2014 but this analyst still feels cautious | iFintechWorld<\/title>\n<meta name=\"description\" content=\"TD Cowen analyst Bryan Bergin sees \u201ccatalysts aplenty\u201d for PayPal Holdings Inc. \u2014 but he also sees the stock as a \u201cshow-me\u201d story, at least in the near\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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