Brookstone Capital Management Decreases Stock Holdings in PayPal Holdings, Inc. $PYPL

Key Points

• Brookstone Capital Management cut its PayPal position by 92.5% in the second quarter, selling 60,154 shares and retaining 4,844 shares worth about $209,000. Institutional investors still own 68.32% of PayPal.
• Analysts maintain a generally cautious outlook, with a consensus “Hold” rating and average price target of $55.72; ratings include nine Buys, 34 Holds and four Sells.
• PayPal’s latest quarter exceeded expectations, with EPS of $1.38 versus $1.28 expected and revenue of $8.68 billion versus $8.47 billion forecast. However, insiders sold 10,612 shares worth roughly $484,534 during the last quarter, while investors continue to debate the sustainability of Venmo growth and monetization.

Brookstone Capital Management reduced its position in shares of PayPal Holdings, Inc. (NASDAQ:PYPL - Free Report) by 92.5% in the second quarter, according to its most recent filing with the SEC. The fund owned 4,844 shares of the credit services provider's stock after selling 60,154 shares during the quarter. Brookstone Capital Management's holdings in PayPal were worth $209,000 at the end of the most recent reporting period.

Other hedge funds and other institutional investors have also recently modified their holdings of the company. Bard Associates Inc. purchased a new stake in PayPal during the fourth quarter valued at $25,000. Kelleher Financial Advisors purchased a new position in shares of PayPal in the 3rd quarter worth $30,000. Caitong International Asset Management Co. Ltd increased its holdings in shares of PayPal by 15,233.3% in the 4th quarter. Caitong International Asset Management Co. Ltd now owns 460 shares of the credit services provider's stock worth $27,000 after buying an additional 457 shares during the last quarter. Safe Harbor Fiduciary LLC bought a new stake in shares of PayPal in the 4th quarter worth about $28,000. Finally, Advocate Investing Services LLC purchased a new stake in shares of PayPal during the 4th quarter valued at about $30,000. 68.32% of the stock is currently owned by institutional investors.

Analysts Set New Price Targets

A number of research analysts recently commented on the stock. JPMorgan Chase & Co. increased their price target on shares of PayPal from $46.00 to $65.00 and gave the company a "neutral" rating in a report on Wednesday, July 29th. Deutsche Bank Aktiengesellschaft reissued a "hold" rating and set a $45.00 price objective on shares of PayPal in a research note on Wednesday, July 29th. HSBC assumed coverage on PayPal in a research report on Friday, July 24th. They set a "buy" rating on the stock. Morgan Stanley set a $45.00 target price on PayPal in a report on Wednesday, July 29th. Finally, BNP Paribas Exane increased their price target on PayPal from $43.50 to $52.00 and gave the company a "neutral" rating in a report on Tuesday, July 21st. Nine equities research analysts have rated the stock with a Buy rating, thirty-four have given a Hold rating and four have given a Sell rating to the company. Based on data from MarketBeat, the company currently has a consensus rating of "Hold" and an average target price of $55.72.

Insider Activity at PayPal

In other PayPal news, insider Frank Keller sold 4,612 shares of the stock in a transaction on Wednesday, June 3rd. The stock was sold at an average price of $42.54, for a total value of $196,194.48. Following the sale, the insider owned 41,567 shares in the company, valued at $1,768,260.18. This trade represents a 9.99% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CAO Chris Natali sold 1,337 shares of PayPal stock in a transaction on Wednesday, July 29th. The stock was sold at an average price of $58.10, for a total value of $77,679.70. Following the sale, the chief accounting officer owned 2,216 shares of the company's stock, valued at approximately $128,749.60. This trade represents a 37.63% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 10,612 shares of company stock worth $484,534 in the last quarter. 0.63% of the stock is owned by company insiders.

More PayPal News

Here are the key news stories impacting PayPal this week:

• Positive Sentiment: Venmo growth supports the recovery story. Venmo’s total payment volume is growing at a mid-teens rate, giving PayPal an important source of transaction growth. Increasing adoption of products such as payments, credit and other monetization tools could help convert that activity into faster revenue growth. PayPal's Venmo: Can Monetization Sustain Its Mid-Teens Growth?
• Positive Sentiment: Recent earnings and operational improvements remain supportive. PayPal reported quarterly earnings of $1.38 per share, ahead of the $1.28 consensus estimate, while revenue of $8.68 billion also exceeded expectations. Commentary highlighting improvements under CEO Enrique Lores and PayPal’s strong July performance has reinforced the view that the company may be stabilizing after a difficult period. Jim Cramer Examines PayPal Holdings Performance Under Enrique Lores and M&A Speculation
• Neutral Sentiment: Valuation and M&A speculation are influencing sentiment. Analysts and commentators are debating whether PayPal remains undervalued following its recent share-price gains. Reported speculation about a potential buyout proposal has added an additional catalyst, but there is no confirmed transaction, making this a source of volatility rather than a firm fundamental driver. Is PayPal Holdings (PYPL) Undervalued After Earnings And Its Recent Share Price Jump?
• Negative Sentiment: Investors remain concerned about monetization and the sustainability of growth. Venmo’s strong payment-volume expansion will not necessarily produce comparable revenue growth unless PayPal can increase product usage and monetization. After the stock’s sharp recent advance, any evidence that revenue conversion or profitability is lagging expectations could limit further upside. PayPal's Venmo: Can Monetization Sustain Its Mid-Teens Growth?

PayPal Stock Performance

PayPal stock opened at $59.20 on Thursday. The company has a debt-to-equity ratio of 0.55, a current ratio of 1.29 and a quick ratio of 1.29. PayPal Holdings, Inc. has a 1-year low of $38.46 and a 1-year high of $79.21. The firm has a market capitalization of $50.64 billion, a P/E ratio of 11.19, a price-to-earnings-growth ratio of 1.44 and a beta of 1.30. The company's 50-day moving average is $49.37 and its 200 day moving average is $47.15.

PayPal (NASDAQ:PYPL - Get Free Report) last announced its quarterly earnings data on Tuesday, July 28th. The credit services provider reported $1.38 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.28 by $0.10. PayPal had a net margin of 14.36% and a return on equity of 24.39%. The business had revenue of $8.68 billion during the quarter, compared to the consensus estimate of $8.47 billion. During the same quarter last year, the firm earned $1.40 earnings per share. The firm's quarterly revenue was up 4.8% compared to the same quarter last year. Research analysts forecast that PayPal Holdings, Inc. will post 5.37 EPS for the current year.

PayPal Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Friday, September 25th. Investors of record on Friday, September 4th will be paid a dividend of $0.14 per share. This represents a $0.56 dividend on an annualized basis and a dividend yield of 0.9%. The ex-dividend date of this dividend is Friday, September 4th. PayPal's dividend payout ratio (DPR) is currently 10.59%.

PayPal Company Profile

PayPal Holdings, Inc operates a global digital payments platform that enables consumers and merchants to send and receive payments online, on mobile devices and at the point of sale. The company provides a broad set of payment solutions, including a digital wallet, merchant payment processing, checkout services, invoicing and fraud-management tools. PayPal's platform is designed to support e-commerce, in-person retail and person-to-person transfers, targeting both individual consumers and businesses of varying sizes.

Key products and services in PayPal's portfolio include the PayPal wallet and checkout ecosystem, the Venmo peer-to-peer mobile app, Braintree's developer-focused payment gateway, Xoom for international money transfers, and PayPal Credit and buy-now-pay-later options.

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