PayPal stock climbs after Truist upgrades to Buy on reasonable revenue consensus
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PayPal Holdings (NASDAQ:PYPL) stock gained 2.5% in Tuesday premarket trading after Truist analyst Andrew Jeffrey upgraded the payments tech stock to Buy from Hold as he's confident the Street's revenue estimates are reasonable and sees potential for new leadership at the company this year.
In addition, the company has M&A and stock buyback flexibility due to its ~$6B of net cash, Jeffrey wrote in a note to clients.
"We would not be surprised by C-suite changes this year, following CFO John Rainey's departure," he said. CEO Dan Schulman turns 65 this year, he points out, and has led the company since September 2014.
"A new CEO would be positioned to build on Mr. Schulman's success, in our opinion, while also wielding a freer M&A hand, perhaps moving the company into card present acquiring, expanding its TAM (total addressable market) and boosting terminal revenue/EPS growth," he added.
In the past six months, the Wall Street's consensus revenue estimate for 2023 has declined by 2.7% to $27.55B
Jeffrey's Buy rating contrasts with the SA Quant rating of Hold and aligns with the average SA Author's rating and average Wall Street rating, both at Buy.
SA contributor Z Kassotakis sees PayPal (PYPL) prospering in the long-run due to its solid financial performance and dominant position in the digital payment industry.