Analysts Say PayPal is a Buy Opportunity

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FILE PHOTO: Illustration photo of the PayPal app on a phone

PayPal Holdings (PYPL) is trying to move higher, as hoped.

As we noted on August 31, “From a current price of $93.48, we’d like to see the PYPL stock test $118 again shortly.”

While it hasn’t hit our target just yet, it’s now up to $97.38, and running.

Helping, Bank of America just upgraded the PYPL stock to a. buy from a neutral rating with a $114 price target.  This comes months after the firm soured on the company after it cut guidance.  However, Bank of America seems to have changed its tune, especially with Elliott Management’s stake in the company.

“We believe Elliott can help enhance shareholder value in two primary ways: 1) driving additional, sizeable cost cuts and efficiencies (which PYPL had already begun to do pre-Elliott), and 2) increasing return of cash to shareholders, largely through buybacks, and perhaps through the introduction of a dividend,” noted Bank of America, as quoted by Barron’s.

Even Raymond James analyst John Davis says PYPL is a buy.

As noted by Barron’s: “PYPL is exactly the type of stock you want to own …,” Raymond James’ Davis said. He finds the fiscal 2023 earnings estimate of $4.78 more than safe and earnings growth could be aided by accelerated capital deployment in the form of share repurchases. PayPal announced a new $15 billion share repurchase authorization plan last month.

From a current price of $97.38, we still believe it could hit $118 again shortly.