Market Overview

Paypal Shares Respond To CFO Statements At Tech Conference


Shares of Paypal Holdings Inc (NASDAQ: PYPL) gained more than $1 on Tuesday after the company's CFO John Rainey presented at Deutsche Bank's annual DB Tech conference.

Deutsche Bank analyst Bryan Keane said in a report that Rainey "pitched a more positive outlook" of the company following recent agreements with Visa Inc (NYSE: V) and Mastercard Inc (NYSE: MA).

Related Link: Paypal's Mastercard Deal Could Be First Step On Path To Peace With Payment Processors

Specifically, Rainey said Paypal's upfront investments in consumer choice from the deals with the credit card companies are likely to drive long-term share gains through higher consumer engagement, less attrition and higher customer activation.

Keane suggested the agreements "provide harmony in the ecosystem" as well as expanding the "ubiquity of Paypal."

Rainey highlighted volume incentives and the elimination fo the Mastercard wallet fee while also stating that investors are wrong to expect any dilution from the deals and won't incur any material additional expenses.

Rainey added that Paypal is "now in a position to provide incremental color" on the impact of its latest credit card agreements and management should at the very lease maintain its mid-term guidance, if not raise it.

Rainey also discussed several opportunities ahead for margin expansion by cutting out costs and driving efficienies through sourcing and procurement, centralizing marketing, streamlining production development and more.

The executive also confirmed Paypal will still seek out acquisitions and investments that could weigh on margins in the short-term but make strategic sense over the longer term. In addition, Paypal will remain opportunistic in future share buybacks and has already bought back $900 million worth of its own stock through the first half of 2016.

Latest Ratings for PYPL

Sep 2019MaintainsOutperform
Sep 2019ReiteratesBuy
Sep 2019UpgradesHoldBuy

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Posted-In: Bryan Keane DB Tech Conference John Rainey PayPal Paypal Credit CardsAnalyst Color Analyst Ratings


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