PayPal (NASDAQ:PYPL) Upgraded to "Equal Weight" at Barclays

Key Points

• Barclays upgraded PayPal from “underweight” to “equal weight” and set a $55 price target, implying modest downside from the prior close.
• Analyst sentiment remains cautious overall: PayPal’s consensus rating is “Hold”, with 7 Buy ratings, 33 Hold ratings, and 5 Sell ratings among analysts tracked by MarketBeat.
• PayPal recently posted better-than-expected quarterly results, with EPS of $1.34 versus $1.27 expected and revenue of $8.35 billion, while the stock traded higher on the day of the report.

PayPal (NASDAQ:PYPL - Get Free Report) was upgraded by equities researchers at Barclays from an "underweight" rating to an "equal weight" rating in a research note issued to investors on Thursday. The firm currently has a $55.00 price objective on the credit services provider's stock. Barclays's price objective would suggest a potential downside of 4.18% from the company's previous close.

A number of other equities research analysts have also recently weighed in on the stock. William Blair restated a "market perform" rating on shares of PayPal in a research note on Wednesday. Cantor Fitzgerald reiterated a "neutral" rating on shares of PayPal in a research report on Thursday. Daiwa Securities Group raised shares of PayPal from a "hold" rating to an "outperform" rating in a research note on Wednesday, May 6th. Truist Financial dropped their price target on shares of PayPal from $45.00 to $44.00 and set a "sell" rating on the stock in a research report on Tuesday, May 12th. Finally, UBS Group upped their price target on shares of PayPal from $44.00 to $48.00 and gave the stock a "neutral" rating in a research note on Wednesday, May 6th. Seven analysts have rated the stock with a Buy rating, thirty-three have given a Hold rating and five have assigned a Sell rating to the company. According to MarketBeat.com, PayPal currently has a consensus rating of "Hold" and a consensus price target of $54.61.

PayPal Stock Performance

Shares of NASDAQ:PYPL traded up $1.88 during trading hours on Thursday, hitting $57.40. The stock had a trading volume of 17,787,162 shares, compared to its average volume of 19,728,938. The stock's fifty day simple moving average is $44.16 and its 200 day simple moving average is $47.19. PayPal has a 1-year low of $38.46 and a 1-year high of $79.50. The firm has a market capitalization of $50.63 billion, a price-to-earnings ratio of 10.81, a PEG ratio of 1.18 and a beta of 1.33. The company has a debt-to-equity ratio of 0.47, a quick ratio of 1.26 and a current ratio of 1.26.

PayPal (NASDAQ:PYPL - Get Free Report) last issued its quarterly earnings data on Tuesday, May 5th. The credit services provider reported $1.34 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.27 by $0.07. PayPal had a return on equity of 25.02% and a net margin of 15.00%.The business had revenue of $8.35 billion during the quarter, compared to the consensus estimate of $8.05 billion. During the same period in the previous year, the firm posted $1.33 earnings per share. The business's revenue was up 7.2% on a year-over-year basis. Sell-side analysts anticipate that PayPal will post 5.32 earnings per share for the current fiscal year.

Insider Buying and Selling at PayPal

In other news, insider Frank Keller sold 10,732 shares of the firm's stock in a transaction on Wednesday, April 29th. The stock was sold at an average price of $49.96, for a total transaction of $536,170.72. Following the completion of the sale, the insider directly owned 41,567 shares of the company's stock, valued at $2,076,687.32. This trade represents a 20.52% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CAO Chris Natali sold 1,337 shares of the business's stock in a transaction on Wednesday, April 29th. The stock was sold at an average price of $49.46, for a total value of $66,128.02. Following the sale, the chief accounting officer directly owned 1,586 shares in the company, valued at $78,443.56. This trade represents a 45.74% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders have sold 20,612 shares of company stock valued at $966,623. Corporate insiders own 0.63% of the company's stock.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently made changes to their positions in the company. Vanguard Group Inc. raised its holdings in shares of PayPal by 6.5% during the 4th quarter. Vanguard Group Inc. now owns 90,376,927 shares of the credit services provider's stock valued at $5,276,205,000 after purchasing an additional 5,534,462 shares in the last quarter. Rule One Partners LLC bought a new position in PayPal during the fourth quarter valued at about $2,043,000. Step Capital Management Pte. Ltd. bought a new position in PayPal during the fourth quarter valued at about $6,130,000. Easterly Investment Partners LLC lifted its position in shares of PayPal by 705.2% in the fourth quarter. Easterly Investment Partners LLC now owns 100,651 shares of the credit services provider's stock worth $5,876,000 after buying an additional 88,151 shares during the last quarter. Finally, Greenwich Wealth Management LLC lifted its position in shares of PayPal by 61.0% in the fourth quarter. Greenwich Wealth Management LLC now owns 125,830 shares of the credit services provider's stock worth $7,346,000 after buying an additional 47,653 shares during the last quarter. 68.32% of the stock is currently owned by institutional investors and hedge funds.

Key Stories Impacting PayPal

Here are the key news stories impacting PayPal this week:

• Positive Sentiment: The reported acquisition offer gives PayPal a clear takeover premium and lifts the stock on speculation that a deal could unlock value. Reuters article
• Positive Sentiment: Several investors and analysts argue the bid may be too low, which could pressure Stripe and Advent to raise their offer and support a higher valuation for PYPL. MarketBeat article
• Positive Sentiment: PayPal’s fundamentals and cheap valuation have also attracted attention, with commentary pointing to strong cash flow and potential upside beyond the initial bid. Seeking Alpha article

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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