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Wells Fargo analyst Jeff Cantwell’s post-conference call with PayPal Holdings, Inc (NASDAQ: PYPL) listed multiple challenges for PayPal going forward.
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They saw that the competition had increased significantly for PayPal across its merchant and consumer businesses due to advances made by others, including Adyen N.V. (OTC: ADYYF), Stripe, and Apple Inc (NASDAQ: AAPL), fueling doubts about the sustainability of PayPal’s moat.
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They believe that PayPal’s share in online checkout may shift further away from PayPal due to weaker product innovation.
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They saw pricing headwinds (take rate) increasingly likely for PayPal over the longer term.
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Due to the challenges, they expected a consensus EPS estimate of $(4.78) to come down for next year, and longer-term sustainable EPS growth for PayPal may miss the 20%+ annually.
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Cantwell reiterated an Overweight on PayPal with a price target of $115 (48% upside).
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Price Action: PYPL shares traded lower by 2.17% at $76 on the last check Monday.
Latest Ratings for PYPL
Date
Firm
Action
From
To
Mar 2022
B of A Securities
Downgrades
Buy
Neutral
Feb 2022
Mizuho
Maintains
Buy
Feb 2022
Barclays
Maintains
Overweight
View More Analyst Ratings for PYPL
View the Latest Analyst Ratings
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