PayPal advances after RayJay upgrades on potential bottom in forward EPS estimates
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PayPal (NASDAQ:PYPL) shares gained 1.5% in Wednesday morning trading after Raymond James analyst John Davis upgraded the payments giant to Outperform from Market Perform, citing increased confidence in prospects for its second-half top line results. 
Davis contended that PayPal's (PYPL) forward EPS estimates have reached a bottom after meaningful negative estimate revisions took hold in the first half of this year. Its consensus EPS revisions going out as far as December 2025 appeared to have leveled off since May, according to this chart. Meanwhile, the company saw 36 upward revisions for its 2022 EPS, compared with just seven downward revisions. 
He cited the fintech's high margin incremental Other Value Added Services revenue as a tailwind going forward amid higher interest rates, he wrote in a note. In Q2, PayPal's OVAS revenue climbed 10% to $534M and +21% from a year before. 
In addition, PYPL's "recently announced $15B buyback authorization ($18B total or 16% of the mkt cap), as well as the potential to cut opex further if needed (up to an additional ~$700M)," makes it "exactly the type of stock you want to own in this tape," Davis said. 
Davis' Outperform rating agrees with both SA Authors' rating and Wall Street Analysts' rating of Buy, though diverges from Quant rating of Hold. 
Previously, (Aug. 31) PayPal rises after BofA upgraded to Buy on cost savings, possible buybacks.