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Investing.com - Mizuho (NYSE:MFG) has reduced its price target on PayPal (NASDAQ:PYPL) to $84.00 from $87.00 while maintaining its Outperform rating following the company’s second-quarter results. The financial services giant, currently valued at $68 billion with a P/E ratio of 15, shows strong fundamentals with a GOOD Financial Health Score according to InvestingPro analysis.
The price target adjustment comes after PayPal shares declined post-earnings as branded checkout foreign exchange neutral total payment volume growth showed a modest quarter-over-quarter deceleration, according to Mizuho’s analysis. Despite the recent pullback, the company maintains robust annual revenue of $31.89 billion, with InvestingPro data suggesting the stock is trading below its Fair Value.
The financial services company also provided transaction margin dollar guidance for the second half of the year that was softer than anticipated, though Mizuho believes this reflects conservatism rather than fundamental weakness.
Despite these concerns, Mizuho’s analysis suggests that core PayPal button growth actually improved compared to first-quarter levels when accounting for other branded components like Buy Now Pay Later and Pay with Venmo.
The research firm highlighted that the BNPL and Pay with Venmo components of branded checkout offer attractive economics, estimating that Pay with Venmo’s transaction margins can be approximately 1.5 times higher than company-wide levels.
In other recent news, PayPal reported its financial results for the second quarter of 2025, surpassing Wall Street expectations in both earnings per share (EPS) and revenue. The company also raised its full-year guidance, anticipating continued growth in transaction margin dollars and non-GAAP EPS. Despite these positive results, Truist Securities maintained a Sell rating on PayPal, expressing concerns about the quality of the company’s growth drivers. KeyBanc Capital Markets also maintained its Sector Weight rating, noting some positive results but expressing concerns about tariff impacts affecting transaction margins and Branded online total payment volume growth. Meanwhile, Keefe, Bruyette & Woods reiterated an Outperform rating with a price target of $85.00, citing higher net revenues and a lower tax rate as reasons for raising EPS estimates for 2025 and 2026. Citizens JMP adjusted its price target for PayPal to $100.00 from $110.00, acknowledging competitive pressures from digital wallets and ongoing investments to boost consumer adoption. These developments reflect a mixed outlook from analysts on PayPal’s future performance.
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