Citi maintains Buy on PayPal stock with $97 target

On Tuesday, Citi analyst Ashwin Shirvaikar reiterated a Buy rating on PayPal (NASDAQ:PYPL) with a consistent price target of $97.00. The financial expert highlighted PayPal’s performance in the fourth quarter, noting that the company surpassed top and bottom-line expectations. This success was attributed to better-than-anticipated total payment volume (TPV) and other value-added services (OVAS). According to InvestingPro data, PayPal, with its substantial $89.7B market cap, appears undervalued based on Fair Value analysis, while maintaining a healthy 40.1% gross margin.

Shirvaikar pointed out that transaction margin dollar growth, excluding interest on customer balances, was 6%, surpassing their estimates. Despite the approximately 6% growth in branded checkout volume—which was lower than expected—the analyst mentioned that an acceleration in the U.S. market suggests that the mix of services might have influenced these figures. InvestingPro analysis reveals strong fundamentals with 8% revenue growth and an attractive PEG ratio of 0.81, suggesting reasonable valuation relative to growth prospects.

Looking ahead, PayPal’s forecast for fiscal year 2025 earnings per share (EPS) is promising, driven by consistent transaction margin dollar growth, excluding interest on customer balances. The forecast also includes a reduced drag from interest income on customer balances compared to the firm’s estimates. Additionally, PayPal’s share repurchase plans exceeded Citi’s projections.

Shirvaikar expressed approval of PayPal’s strategic discipline and direction toward profitable growth. He anticipates that the earnings call at 8 AM ET will provide further insights, particularly regarding the trajectory of branded checkout and transaction margin dollars.

In other recent news, PayPal is experiencing a series of developments. BTIG analyst Lance Jessurun reaffirmed a Neutral rating on PayPal stock, raising concerns about the company’s growth outlook for 2025. Similarly, KeyBanc Capital Markets maintained a "Sector Weight" rating on PayPal, expressing caution regarding the company’s transaction margin dollar growth guidance for fiscal year 2025.

TD Cowen analyst Bryan Bergin raised the price target for PayPal stock to $90.00, noting positive momentum in the fourth quarter due to an acceleration in branded checkout volumes. The company also announced the departure of Executive Vice President and Chief Product Officer John Kim, effective March 31, 2025, as per a recent SEC filing.

Jefferies reiterated a Hold rating on PayPal, emphasizing the need for further acceleration in branded Total (EPA:TTEF) Payment Volume (TPV) for improved stock performance. These are among the recent developments impacting PayPal, providing investors with insights into the company’s financial trajectory and strategic direction.

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