Paypal upgraded to Outperform at BMO on normalized 2023 estimates for valuation
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Paypal (NASDAQ:PYPL)
trades 1.7% higher premarket after BMO Capital analyst James Fotheringham upgraded the stock to Outperform from Market Perform; PT was reduced to $224 from $278.
The analyst cites valuation for the upgrade following 2021's "de-rating," where the stock went from 51 times to 28 times on rolling 2-year-forward P/E basis.

Tax loss selling is done and investors are focused on more normalized 2023 estimates for valuation, Fotheringham tells investors in a research note.
The analyst sees 21% annual organic revenue growth potential for PayPal and believes payment stocks are "set up constructively for this year."
Quick look at company's estimates for FY21:


Among others, he recommends buying Nuvei (NASDAQ:NVEI) and Global Payments (NYSE:GPN) as GARP-oriented opportunities; also recommends MasterCard (NYSE:MA) and Visa (NYSE:V) as core holdings.