PayPal, Hulu Partner: The Sell-Side Reacts

Streaming video service Hulu plans to accept Pay with PayPal Holdings Inc. PYPL-owned Venmo for subscription payments on new accounts. 

The Analysts

Bank of America Merrill Lynch analyst Jason Kupferberg maintained a Buy rating on PayPal with a $102 price target. 

UBS analyst Eric E. Wasserstrom maintained a Buy rating and $95 price target. 

UBS Looks At Volume Growth

For PayPal, total payment volume — TPV — indicates the volume of payments successfully processed through the platform. On a scale from one to five, investors rated the company's TPV growth at 4.5.

This demonstrates a focus on strong volume expansion, Wasserstrom said in a note.

“Interestingly, MDR compression only rated 1.8, suggesting investors don't see risk to pricing as critical to revenue growth. Venmo monetization rated 3.4, indicating investors are beginning to discount this still-nascent initiative into operational and financial expectations.”

The focus on contextual commerce was solely given a 0.9, indicating limited influence on investor expectations, the analyst said. 

BofA Highlights Holiday E-Commerce

The success in online shopping becomes increasingly significant every year, as the weekend following Thanksgiving is now the most popular online shopping weekend to date, Kupferbeg said in a note.

Black Friday sales increased 24 percent year-over-year, while Cyber Monday sales grew 20 percent year-over-year, according to Adobe data.

“PYPL announced that they processed $1-billion-plus in mobile payment volume on both Black Friday and Cyber Monday — the first $1-billion-plus mobile volume days in PayPal’s history — and processed more than $11,000 in mobile payment volume per second during the period between Thanksgiving and Cyber Monday.”

Price Action

PayPal shares were up 1.32 percent at $83.36 at the time of publication Monday. 

Related Links:

Venmo's Andrew Kortina Talks Marketing, Virtual Assistants

PayPal Stands Out In Crowded Online Payments Space, Atlantic Securities Says In Upgrade

Posted In: Bank of America Merrill LynchEric E. WasserstromHuluJason Kupferbergpayment servicessubscription servicesUBSVenmoAnalyst ColorPrice TargetReiterationAnalyst Ratings