Jefferies Maintains Hold Rating on PayPal Holdings Inc. Stock with Price Target of $75.00
Jefferies has reaffirmed their Hold rating on PayPal Holdings Inc. (NASDAQ:PYPL) stock, with a price target of $75.00. The firm's analysis indicates stable growth in gross profit for the company in the second half of the year, with a positive outlook for PayPal's Online Virtual Auction Services (OVAS) through 2024. However, concerns arise for 2025 due to anticipated rate cuts impacting gross profit growth.
The firm predicts continued growth in gross profit for the latter half of the year, exceeding 6% for fiscal year 2024. This growth is expected to be driven by a higher take rate and lower transaction expense rate, outperforming Wall Street estimates.
Looking ahead to 2025, Jefferies anticipates a negative impact on gross profit growth from rate cuts, with OVAS contribution shifting from a boost to a drag. Despite short-term confidence in PayPal's performance, the firm remains cautious about macroeconomic factors affecting the company's future.
In recent news, PayPal reported positive second-quarter earnings with an increase in total payment volume and revenue. However, the company plans to cut jobs amid uncertain economic conditions. Various financial institutions have maintained their positions on PayPal stock, with some expressing confidence in its future trajectory.
Additionally, PayPal has introduced Fastlane, a feature to enhance online transactions, in partnership with Adyen. This innovation has led to increased checkout conversion rates and reduced checkout times.
InvestingPro Insights:
- PayPal has a robust market capitalization of $70.9 billion and a favorable Price-to-Earnings (P/E) ratio, indicating investor confidence in its earnings.
- Analysts predict profitability for PayPal this year, with steady revenue growth showcasing a healthy financial trajectory.
- Management's share buyback strategy could signal confidence in future value, a key aspect for investors to consider.
For a more in-depth analysis and additional tips on PayPal, readers can refer to InvestingPro. Stay informed to make informed investment decisions.
This article provides valuable insights into PayPal's financial performance and strategic outlook, essential for investors looking to navigate the market effectively.