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SunTrust Expects A 'Solid' Q1 From PayPal

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TPV growth and cost rationalization are expected to boost Paypal Holdings Inc (NASDAQ: PYPL) quarterly results. SunTrust’s Robert Peck maintained a Buy rating for the company, while raising the price target from $38 to $44. The analyst expects PayPal to report robust 1Q results, and neutral-to-positive revision to full-year consensus expectations.

Positive Indications For 1Q

Analyst Robert Peck enumerated the positive indicators for 1Q as:

  1. Management Comments: Recent management comments have suggested that TPV in 1Q support expectations of an acceleration in TPV in 2016 as well as that economic weakness has not as yet had an impact on the company’s performance.
  2. One Touch: Expanded from 23 markets and ~14m users at yearend to 143 markets and 18m users in end-February.
  3. Xoom: Expanded from 41 markets in January to 49 markets.
  4. Braintree: Peck quoted PayPal’s CEO as saying in February that Braintree had a "backlog equal to the entire amount of merchants put live to sites all of last year".
  5. Venmo: Monthly volume crossed $1b for the first time in January, up from ~$0.8b in 4Q15.
  6. Expense rationalization: PayPal’s CFO targeting marketing and procurement spend inefficiencies
  7. eBay: eBay Inc (NASDAQ: EBAY) contributes 19 percent of TPV and its average monthly SSS growth improved sequentially in 1Q, as per ChannelAdvisor.

Latest Ratings for PYPL

DateFirmActionFromTo
Jul 2017SunTrust Robinson HumphreyDowngradesBuyHold
Jul 2017Deutsche BankMaintainsBuy
Jul 2017BernsteinUpgradesMarket PerformOutperform

View More Analyst Ratings for PYPL
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Posted-In: Robert Peck SunTrustAnalyst Color Long Ideas Price Target Reiteration Analyst Ratings Trading Ideas

 

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