PayPal Q3 earnings has potential for beat, in-line revenue, BofA says
Justin Sullivan

Ahead of PayPal's (NASDAQ:PYPL) Q3 earnings on Nov. 3, Bank of America Securities analyst Jason Kupferberg sees upside potential for EPS and Q3 revenue roughly in line with consensus. PYPL stock has risen 1.6% in Wednesday late morning trading.
Deteriorating macro environment, especially in the U.K. and Europe, could tug down on results, while other value-added services are likely to trend better than planned due to higher interest rates. 
"We continue to see upside potential to margins/EPS due to PYPL's increased focus on cost controls and involvement of activist Elliott Management," Kupferberg wrote in a note to clients. BofA's Q3 non-GAAP EPS estimate is $0.96, the same as the Wall Street consensus.
PayPal (PYPL), which was added to BofA's US1 list in September, trades at 17.3x BofA's above-Street non-GAAP '23 EPS estimate, "which in our view is attractive risk/reward," the analyst said. BofA's 2023 EPS estimate is $4.92 vs. consensus of $4.82.
Potential catalysts include H2 2022 top-line re-acceleration and Q1 2023 Analyst Day. In addition, investors may get updates on the company's credit externalization strategy during Q3 and Q4 earnings calls.
Recall that in February, PayPal (PYPL) pivoted on its customer acquisition strategy to increase user engagement rather than spend on marketing to attract new users.
Earlier this week, PayPal (PYPL) was reported to have retracted a policy that would have fined users for misinformation. SA contributor J.G. Collins discusses the damage done by the release of a draft of PYPL's Acceptable Use Policy.