Morningstar Investment Management LLC Reduces Position in PayPal Holdings, Inc. $PYPL

Key Points

• Morningstar Investment Management LLC cut its PayPal stake by 73.7% in the fourth quarter, selling 112,562 shares and leaving it with 40,115 shares worth about $2.34 million.
• Analyst sentiment remains cautious: several firms lowered price targets, and PayPal currently holds a consensus rating of “Hold” with an average price target of $55.85.
• PayPal reported solid recent results, with Q1 EPS of $1.34 and revenue of $8.35 billion, both above estimates, while also announcing a quarterly dividend of $0.14 per share.

Morningstar Investment Management LLC cut its position in shares of PayPal Holdings, Inc. (NASDAQ:PYPL - Free Report) by 73.7% in the fourth quarter, according to the company in its most recent filing with the Securities and Exchange Commission. The firm owned 40,115 shares of the credit services provider's stock after selling 112,562 shares during the period. Morningstar Investment Management LLC's holdings in PayPal were worth $2,342,000 at the end of the most recent quarter.

Other hedge funds and other institutional investors have also bought and sold shares of the company. Diversified Investment Strategies LLC boosted its position in PayPal by 27.9% in the 4th quarter. Diversified Investment Strategies LLC now owns 75,463 shares of the credit services provider's stock valued at $4,406,000 after buying an additional 16,468 shares during the period. New Age Alpha Advisors LLC boosted its position in PayPal by 15.6% in the 4th quarter. New Age Alpha Advisors LLC now owns 98,133 shares of the credit services provider's stock valued at $5,729,000 after buying an additional 13,218 shares during the period. Allen Capital Group LLC boosted its position in PayPal by 5.7% in the 4th quarter. Allen Capital Group LLC now owns 43,599 shares of the credit services provider's stock valued at $2,545,000 after buying an additional 2,370 shares during the period. Swedbank AB boosted its position in PayPal by 1.6% in the 4th quarter. Swedbank AB now owns 948,406 shares of the credit services provider's stock valued at $55,368,000 after buying an additional 14,777 shares during the period. Finally, North Star Asset Management Inc. boosted its position in PayPal by 2.8% in the 4th quarter. North Star Asset Management Inc. now owns 235,067 shares of the credit services provider's stock valued at $13,723,000 after buying an additional 6,366 shares during the period. Hedge funds and other institutional investors own 68.32% of the company's stock.

Analyst Upgrades and Downgrades

PYPL has been the subject of several research reports. Morgan Stanley lowered their price objective on shares of PayPal from $50.00 to $34.00 and set an "underweight" rating for the company in a research report on Wednesday, February 4th. Truist Financial lowered their price objective on shares of PayPal from $45.00 to $44.00 and set a "sell" rating for the company in a research report on Tuesday, May 12th. Evercore lowered their price objective on shares of PayPal from $65.00 to $40.00 and set an "in-line" rating for the company in a research report on Tuesday, February 3rd. TD Cowen reissued a "hold" rating on shares of PayPal in a research report on Tuesday, February 3rd. Finally, JPMorgan Chase & Co. reduced their price target on shares of PayPal from $70.00 to $46.00 and set a "neutral" rating for the company in a report on Wednesday, February 4th. Eight equities research analysts have rated the stock with a Buy rating, thirty-two have given a Hold rating and five have issued a Sell rating to the company's stock. According to data from MarketBeat.com, PayPal presently has an average rating of "Hold" and a consensus price target of $55.85.

PayPal Stock Performance

NASDAQ PYPL opened at $44.23 on Tuesday. The company has a quick ratio of 1.26, a current ratio of 1.26 and a debt-to-equity ratio of 0.47. The firm has a market cap of $39.02 billion, a PE ratio of 8.30, a price-to-earnings-growth ratio of 1.11 and a beta of 1.39. The company has a 50 day moving average price of $46.40 and a 200 day moving average price of $51.91. PayPal Holdings, Inc. has a 52 week low of $38.46 and a 52 week high of $79.50.

PayPal (NASDAQ:PYPL - Get Free Report) last posted its quarterly earnings data on Tuesday, May 5th. The credit services provider reported $1.34 EPS for the quarter, topping the consensus estimate of $1.27 by $0.07. The firm had revenue of $8.35 billion during the quarter, compared to analyst estimates of $8.05 billion. PayPal had a net margin of 15.00% and a return on equity of 25.02%. PayPal's revenue was up 7.2% on a year-over-year basis. During the same quarter in the previous year, the business posted $1.33 EPS. As a group, sell-side analysts forecast that PayPal Holdings, Inc. will post 5.3 EPS for the current fiscal year.

PayPal Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Thursday, June 25th. Investors of record on Thursday, June 4th will be paid a dividend of $0.14 per share. This represents a $0.56 annualized dividend and a dividend yield of 1.3%. The ex-dividend date is Thursday, June 4th. PayPal's payout ratio is 10.51%.

Insider Buying and Selling

In other PayPal news, CAO Chris Natali sold 2,208 shares of the business's stock in a transaction that occurred on Tuesday, March 3rd. The shares were sold at an average price of $44.73, for a total transaction of $98,763.84. Following the sale, the chief accounting officer owned 1,140 shares of the company's stock, valued at approximately $50,992.20. The trade was a 65.95% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, insider Suzan Kereere sold 13,515 shares of the business's stock in a transaction that occurred on Tuesday, March 3rd. The stock was sold at an average price of $46.02, for a total transaction of $621,960.30. Following the sale, the insider directly owned 30,983 shares in the company, valued at approximately $1,425,837.66. This represents a 30.37% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold a total of 57,373 shares of company stock worth $2,684,341 in the last 90 days. 0.63% of the stock is owned by corporate insiders.

About PayPal

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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